Pressure on Standard Life Aberdeen over fund woes

The Global Absolute Return Strategies fund attracted huge levels of investment in its early years but has seen significant outflows of late.
The Global Absolute Return Strategies fund attracted huge levels of investment in its early years but has seen significant outflows of late.
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The level of outflows from Standard Life Aberdeen’s flagship fund will come under the spotlight this week when the investment giant reports results.

Last year the Edinburgh-headquartered group’s combined Aberdeen Standard Investments arm saw net fund outflows of £22.1 billion with more than £10bn of that accounted for by its Global Absolute Return Strategies fund (GARS).

Launched by Standard Life Investments in 2006, the fund attracted huge levels of investment in its early years but has seen significant outflows of late.

George Salmon, equity analyst for Hargreaves Lansdown, said he “wouldn’t be surprised if outflows in the flagship GARS fund have increased”.

“The fund has continued to deliver a poor investment performance, losing around 4 per cent. A steady stream of outflows isn’t a great look for the group which is increasingly focused on asset management after the sale of its remaining life books,” Salmon said.

The Scots financial giant is due to report its interim results on Tuesday, almost a year since the mega-merger between Standard Life and Aberdeen Asset Management.

Analysts have pencilled in adjusted pre-tax profits of about £496 million. Assets under management are expected to be around £556bn after net outflows of £17.8bn.

Investors will also be looking for a progress update on the £2bn disposal of the group’s insurance business to Phoenix which they gave overwhelming approval to in June.

The group plans to return £1.75bn to shareholders on the back of the proceeds via a B share scheme issue and a share buyback of up to £750m.