Comment: Ten years on, Gilbert profiting from adversity

Terry Murden. Picture: Phil Wilkinson
Terry Murden. Picture: Phil Wilkinson
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MARTIN Gilbert deserves credit for what he has achieved at Aberdeen Asset Management, but sometimes he must pinch himself that it is really happening.

A decade ago, the company almost went bust and his career was for the chop after the debacle of the split capital trust mis-selling scandal. Now, after pulling off a deal to acquire Scottish Widows Investment Partnership (Swip) from Lloyds Banking Group, he is heading a company that will become the biggest listed independent fund manager in Europe and a top ten global player.

Reflecting on his change of fortune, Gilbert told me yesterday that “adversity is what makes you. But we don’t want to be testing that theory again.”

For his sake, it must be hoped that his supporters stay loyal. The shares were marked higher, indicating approval of the all-share deal, but sceptics remain.

Late interest from Australian investment bank Macquarie almost led to a bidding battle, though Gilbert said the offer for Lloyds to take a 9.9 per cent stake did not differ from the original.

Analysts believe it is still fairly cheap at 0.4 per cent of assets, but there are questions about what Aberdeen has actually bought. Some 72 per cent (£98 billion) of Swip’s funds under management are low-margin life assets, which are effectively in run-off.

Furthermore, Aberdeen’s naysayers question the return on equity it has bought in recent times, citing the fall in the value of a dozen acquisitions. But Gilbert insists they are wrong and that it has added considerable value; hence its rise up the league table of European fund managers.

Will it mean the business may be sold, now that it has scaled up and probably reached something of a peak? At least one analyst argues that this may in part be the motivation for doing a deal that does not add a lot of value.

While investors debate its merits, Lloyds Banking Group will be happy to have offloaded a business that it has not been entirely comfortable about holding. Aberdeen will seek to improve performance at a company that has been through a few hoops in recent years as Lloyds struggled to get it right.

Gilbert was giving little away on the future shape of the management of his new charge or its strategy. But the sheer domination of the Edinburgh business in the newly-combined group will clearly influence both entities.

Uneven rewards for Britain’s female talent

THE appointment of Liv Garfield as head of Severn Trent is not only a victory for women at the top, but also for younger women in particular. At 38 she is at a stage in life when most men and women are still climbing the greasy pole. To be hired as chief executive of a FTSE 100 company is an honour for either sex and a credit to Garfield’s abilities.

She becomes the fourth female in the index of leading companies, a number that is clearly too low, but which shows a stubborn resistance to change. With one of those due to leave to join Apple, the present complement will only remain if Moya Greene’s Royal Mail makes it into the top 100 at the next review.

There is much talk of quotas, though many women – even those struggling for attention – are not keen on promotion on anything other than merit. Even so, the paltry number of women at the top indicates that talent is not being equally rewarded.