AAM to slow emerging markets growth as figures beat forecasts

Bill Rattray of AAM doesn't want to cast net too wide
Bill Rattray of AAM doesn't want to cast net too wide
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FUND manager Aberdeen Asset Management (AAM) is aiming to slow the amount of cash investors are placing into emerging markets after enjoying a better-than-expected rise in first-quarter new business.

Although clients withdrew money from the firm’s fixed income and property funds, strong flows into its Asia Pacific and emerging market equities funds saw net new business rise by £1.1 billion. Analysts at RBC Capital Markets had pencilled in a £900 million increase.

Assets under management rose to £193.4bn by the end of December, up from £187.2bn in September and ahead of the £191.3bn forecast by analysts at Credit Suisse.

With more money flowing into higher-margin pooled funds invested in equities and bonds, and away from lower-margin segregated portfolios, AAM said it had enjoyed a £30m boost to annualised fee income.

However, the fund manager said the rush to emerging markets such as Asia, eastern Europe and Latin America was running “at a higher rate than we are comfortable with” and it was looking at ways of slowing the flow without compromising performance.

Finance director Bill Rattray said the firm was keen to maintain its focus on investing in well-researched stocks for the long term, and wanted to avoid casting its net too widely “under the sheer force of the inflows”.

He added: “In terms of pricing, we’re not aiming to increase the rate card on these products, but we can be smarter in the level of discounts we’re prepared to give to intermediaries.”

Chief executive Martin Gilbert said the new year had started on a “more positive tone”, but he warned that uncertainty still plagued global stock markets and the months ahead could see further periods of volatility.

Today’s trading update came as the group held its annual meeting, where 11.4 per cent of votes cast by shareholders were opposed to its pay plans.

The fund managers’ annual report, published last month, showed Gilbert was awarded £4m in bonuses on top of his £500,000 salary, while total boardroom pay rose to £14.13m in the year to 30 September, from £13.57m the previous year.