AAM new business grows by £700m

Aberdeen Asset Management posted £700 million of net new business in the last quarter as investors defied market uncertainty by piling into high-risk funds.

The fund manager revealed yesterday that assets under management grew 2.5 per cent to 185.8 billion in the three months to the end of June. The group's net inflows were its strongest since last September, despite recent volatility in markets.

It attracted a net 2.6bn into equity funds alone in the last quarter. The biggest sales were into global equity funds, at a net 1.3bn, and global emerging markets, at 1.2bn, but there was also 200m of sales into its US equity offerings. Property funds saw net inflows of 400m, although redemptions outstripped new money into fixed income, alternative strategy and money market funds.

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Martin Gilbert, chief executive of Aberdeen, said it had made good progress over the last three months. "Flows into higher margin products have more than offset redemptions in terms of revenue ensuring profit, cashflow and margins remain strong," he said.

"The investment environment is likely to be turbulent for at least the next few months. However, market volatility also creates opportunities particularly for long-term investors with a fundamental approach like Aberdeen."

While total new business of 10.9bn was slightly below the level in the same quarter in 2010, redemptions also slowed, giving a net new business of 700m, up from 300m in a year earlier.

Stuart Duncan, financials research analyst at Peel Hunt, said: "Aberdeen continues to tick many of the boxes we look for in an asset manager. The group has a diverse business mix, improving revenue and operating margins, and a focus on cash which is delivering a strengthening balance sheet (giving rise to the possibility of our dividend forecasts looking overly conservative]."