Bumper payout looms for Aberdeen investors

ABERDEEN Asset Management is gearing up to make hefty returns of cash to shareholders as it reports on further strong growth in its equities business.

Tomorrow’s trading update will detail the value of assets under management by Aberdeen, ahead of its annual results in November.

The fund manager is expected to report positive net inflows – a result that sector rivals such as F&C, Henderson and Royal London Asset Management have failed to achieve in recent months.

Owen Jones, an analyst at Shore Capital, said Aberdeen has a “demonstrable ability to attract new money”, particularly through its higher-margin equity division.

This will more than compensate for anticipated declines in fixed income investments such as bonds.

“There will be net inflows – that is the main thing,” Jones said.

Aberdeen, which had nearly £183 billion of assets under management at 30 June, has been accruing cash since putting the brakes on a decade of acquisitions, which ended in 2010.

The company has said it will return “surplus” money to shareholders once it has reached a comfortable capital position of at least £200 million net cash.

Jones believes this could take the form of a special dividend, though such a payment would be unlikely before 2013.

In addition, he anticipates higher regular dividends, possibly rising at a faster pace than Aberdeen’s earnings growth.

Peel Hunt analyst Stuart Duncan said the latter seemed most likely, making Aberdeen an attractive ­proposition compared with near-stagnant dividend payments from other fund ­managers.

“It is one of the few stocks in the sector where there is a clear story about earnings growth,” Duncan said.