Investors withdrew their money from Aberdeen Asset Management for the 14th quarter in a row in the three months to the end of September, bringing net outflows for the company’s 12-month financial period to £32.8bn.
In the Scottish company’s end-of-financial-year results, posted today, the London Stock Exchange-listed Aberdeen said the figures were marginally down on its 2015 year.
Its equities business saw net outflows fall to £883m in the quarter, compared with £2.9bn in the previous three month period. However, while the three months to September saw some improvement, over the 12 months investors nevertheless took £13.6bn from Aberdeen’s equity portfolios.
All in all, it’s been a challenging year for Aberdeen, which specialises in emerging market and Asian investment funds. It dropped out of the FTSE 100 in March, and in September was asked by the UK regulators to boost its capital reserves.
Nevertheless, Aberdeen chief executive Martin Gilbert, pictured, focused on the positive today, pointing out that the firm’s assets under management rose to £312bn on the back of strong asset returns and a weaker sterling, up from £284bn 12 months previously.
He said the outflows were driven by “economic and political news flow”, which weighed on investor sentiment.
“These financial results reflect, in part, our diversified business model and strict cost management,” Gilbert added.
“Structural themes including fee pressure, technological innovation and greater regulatory requirements are a focus for all asset managers.
“By continuing to invest in the business and by being a good steward of our customers money we are committed to helping our investors – from individuals through to institutions – achieve their financial goals.”
The company’s revenue in the year to the end of September fell 14%, to £1bn, while underlying pretax profit fell to £352.7m from £491.6m in the same period a year ago.
Aberdeen chairman Simon Troughton said the level of equities outflows “declined steadily” throughout the year, down to £13.6bn this year from £16.4bn in 2015.
Troughton added the early part of 2016 saw the continuation of the volatile and challenging market conditions experienced in 2015. He said that markets and investor sentiment may continue to fluctuate, highlighting the US election as part of a series of political events which will continue to impact markets.
Troughton noted that emerging market equities recorded a small net inflow £600m for the final quarter, albeit negative for the year overall with net outflows for the year of £800m.
“It has been pleasing to see more positive investor sentiment towards emerging markets as the year progressed and, while industry flows have initially favoured passive and Exchange Traded Funds (ETF) strategies, we saw healthy net inflows to our emerging markets equities in the final quarter,” Troughton said.
The company’s flagship emerging markets equities business, which Gilbert said had seen a turn to positive sentiment in the third quarter, is set to again struggle in the final three months of the year.
Gilbert said while emerging market equities, and equities in general, had done well, Donald Trump’s election in the US had reversed sentiment.
He said: “It is still early days but [the election] certainly stop the inflows [into emerging market equity funds] and there has been a change in asset allocation from our major clients like private banks, who were positive have gone neutral again.
“We haven’t seen the outflows we were seeing but it is not as positive as it was, which is a pity as sentiment was turning and it’s been a good quarter for equities, so it will be a tougher quarter [in Q4 2016].”
|Underlying results: before amortisation, restructuring and acquisition-related items|
|Profit before tax||£352.7m||£491.6m|
|Diluted earnings per share||20.7p||30.0p|
|Profit before tax||£221.9m||£353.7m|
|Diluted earnings per share||12.6p||21.8p|
|Total dividend per share||19.5p||19.5p|
|Gross new business||£39.0bn||£42.5bn|
|Net new business||(£32.8bn)||(£33.9bn)|
|Assets under management at the year-end||£312.1bn||£283.7bn|
Source: Aberdeen Asset Management