Proactiveinvestors United Kingdom Aberdeen Asset Management https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Aberdeen Asset Management RSS feed en Wed, 26 Jun 2019 07:08:16 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - FCA review of fund management industry long on recommendations and cajoling ]]> https://www.proactiveinvestors.co.uk/companies/news/179992/fca-review-of-fund-management-industry-long-on-recommendations-and-cajoling-179992.html This morning’s report from the City watchdog on asset managers identified many areas of concern, but what it to be done to address them?

A little while ago we were told there was no “magic money tree” only to find out later there is, so one should be reticent about making claims that there is no magic wand that the Financial Conduct Authority (FCA) can wave, but it seems that its solutions boil down to a certain amount of cajoling and yet more consultation.

So, more stress is going to be put upon ensuring asset managers act in the best interests of their clients.

WATCH: FCA review: 'Good luck with that!', says Proactive's John Harrington

One can imagine the furore should the British Medical Association come out and suggest that, on the whole, doctors should act in the best interests of their patients, but apparently the FCA felt the need to remind fund managers that they are primarily there to make money for their clients.

To ensure that fund managers are not naughty boys (or girls), the FCA plans to introduce a minimum level of independence in governance structures.

Introducing non-executive directors on to boards has not always prevented executive directors from planting their snouts deeply into the trough, but we rarely get to find out about the well-timed bit of sage advice behind closed doors, so on balance this seems like a sensible recommendation.

The City watchdog said it is also consulting on requiring fund managers to return any risk-free “box profits” to the fund, rather than trousering them themselves.

To the uninitiated, which included me until about five minutes ago, this refers to the difference in the bid/offer spread on units in a unit trust. The FCA said it has no problem with a fund selling units at a higher price than it buys them at any given moment, but it thinks the monies should flow back into the fund or, failing that, investors should be aware that the company managing the fund is pocketing the difference.

The FCA said it also wants to make it easier for fund managers to switch investors to cheaper share classes. It said it is consulting on whether it should introduce a phased-in “sunset clause” for trail commissions – the annual fee paid to financial advisers by their customers over the lifetime of products such as pensions, with-profits bonds and unit trusts.

For a long time, the City watchdog has been banging on about introducing the disclosure of a single all-in fee to investors. It could be the equivalent to the health warning on the fags packet, ensuring investors enter into a commitment at their own risk.

On top of that, the FCA is also in favour of consistent and standardised disclosure of costs and charges to institutional investors.

The Department of Work and Pensions has been called on to review and, where possible, remove barriers to pension scheme consolidation, so that economies of scale can be brought into play.

Meanwhile, the FCA has taken aim at the three largest investment consultants and said it is still mulling whether to refer them to the Competition and Markets Authority – the old Monopolies Commission but in newer clothes.

It is also recommending that the Treasury considers bringing investment consultants into what it calls “the regulatory perimeter” – making it sound like a corral where wayward cattle are herded.

It also announced that it would be launching a market study into investment platforms.

So, in summary, some sensible suggestions and plenty of consultations ahead giving the extremely wealthy, well-connected fund management industry the opportunity to bend the FCA to its will.

Shares in fund management companies did not exactly fall out of bed following the publication of this review, which suggests that, well-meaning though the recommendations are, the cosy world of fund management is not yet thinking of cancelling the Bolli and switching to Prosecco just yet.

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Wed, 28 Jun 2017 15:35:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/179992/fca-review-of-fund-management-industry-long-on-recommendations-and-cajoling-179992.html
<![CDATA[News - Merging Aberdeen Asset sees strong rebound in first-half results, boosted by market gains, cost-cutting ]]> https://www.proactiveinvestors.co.uk/companies/news/177151/merging-aberdeen-asset-sees-strong-rebound-in-first-half-results-boosted-by-market-gains-cost-cutting-177151.html Aberdeen Asset Management PLC (LON:ADN), the fund manager which in March agreed an £11bn merger with rival Standard Life PLC (LON:SL.) saw a strong rebound in first-half results, boosted by market gains and cost-cutting, with client outflows slowing.

The emerging-markets focused firm said its revenues for the six months to March 31 rose by 10.6% to £534.9mln, up from £483.6mln at the same stage last year, while underlying pre-tax profit increased by 19.8% to £195.2mln.

READ: Standard Life and Aberdeen Asset Management agree merger CLICK HERE: For a daily round-up of all the Proactive news

Aberdeen’s assets under management at the end of March were £308.1bn, up from £312.1bn at the end of September as outflows of £13.4bn from existing funds and £5.7bn after it restructured parts of its operations were offset by market and currency gains of £15.1bn.

The fund manager said net client outflows were heaviest in the first quarter, at £10.5bn and slowed markedly in the second quarter to £2.9bn.

The firm left its interim dividend unchanged at 7.5p, as expected under the merger terms.

Sentiment towards emerging markets “improving”

Aberdeen’s chief executive Martin Gilbert said: "These figures reflect improving sentiment towards emerging markets”.

He added: “ Global growth appears to be recovering but elections and geo-political issues will continue to weigh on investor sentiment.”

Gilbert also said the proposed merger with Standard Life remains “on track” with the deal expected to complete in the fourth quarter of Aberdeen's financial year, which ends in September.

READ: Merger with Aberdeen Asset Management a bold gamble, says Berenberg

Media reports at the weekend suggested the two firms will pay around £35mln in retention bonuses to star executives to prevent them quitting during the deal.

In early morning trading, shares in Aberdeen took on nearly 3%, or 8.3p at 287.3p, while Standard Life shares gained 2.1%, or 7.6p at 371.5p.

The proposed all-share merger deal initially valued each Aberdeen share at 286.5p. Aberdeen shareholders will have a 33.3% stake in the merged group while Standard Life's shareholders will own 66.7%.

Rationale of merger with Standard Life looks “pretty compelling”

Laith Khalaf, senior analyst at Hargreaves Lansdown said: ‘Aberdeen has been leaking funds for four years now, but over the last six months the fund group has been bailed out by rising markets and weakening sterling, which have both helped to buoy assets under management.

He added: “Without these favourable effects, profit growth wouldn’t have looked quite as rosy, though the company has delivered on its target of making £70 million of annual cost savings, which also helps to cushion the blow of lost assets.”

The analysts concluded: “Against a backdrop of weak flows, the rationale of a merger with Standard Life looks pretty compelling, particularly given the gauntlet laid down by passive funds for the active fund industry.”

CLICK HERE: For a daily round-up of all the Proactive news ]]>
Tue, 02 May 2017 10:17:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/177151/merging-aberdeen-asset-sees-strong-rebound-in-first-half-results-boosted-by-market-gains-cost-cutting-177151.html
<![CDATA[News - RBC Capital lifts rating for Aberdeen Asset Management to 'sector perform' ]]> https://www.proactiveinvestors.co.uk/companies/news/172850/rbc-capital-lifts-rating-for-aberdeen-asset-management-to-sector-perform--172850.html Aberdeen Asset Management PLC (LON:ADN) got a lift today as broker RBC Capital raised its rating for the emerging markets-focused funds group, albeit only to ‘sector perform’ from ‘underperform’.

In early morning trading, Aberdeen shares were up nearly 5%, or 12.1p at 262.9p.

In a note to clients, RBC’s analysts said they have modestly raised their earnings per share estimates for the asset manager by 0.4% for 2017 and 0.1% for 2018 “as  lower net flow assumptions are offset by improved investment performance and FX assumptions.”

However, their 2019 EPS estimate is reduced by 2.8% and they trimmed their target price to 285p from 290p.

The analysts said: “While we think there is decent upside potential to our price target, given the risks, we do not believe a more positive rating is warranted.

“Nonetheless, the risk in the near-term is to the upside based upon an oversold share price, a reasonable valuation, a high dividend yield, stabilising revenue margin, well controlled cost base, and the real possibility of M&A.”

They added: “Aberdeen’s negatives are well-known by the market and more than reflected in the share price; we thus believe an upward redistribution of analyst ratings is more likely than an increase in the negative bias of the distribution.”

The analysts said the biggest risk to its rating remains Aberdeen’s net fund flows, which they anticipate seeing a material recovery in 2018.

However, they added: “Should flows not recover as we anticipate, this could mean that our upgrade was premature.”

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Wed, 08 Feb 2017 09:40:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/172850/rbc-capital-lifts-rating-for-aberdeen-asset-management-to-sector-perform--172850.html
<![CDATA[News - Aberdeen Asset hit by big outflows from its funds in the wake of Donald Trump’s victory ]]> https://www.proactiveinvestors.co.uk/companies/news/172555/aberdeen-asset-hit-by-big-outflows-from-its-funds-in-the-wake-of-donald-trumps-victory-172555.html Big outflows from its funds in the wake of Donald Trump’s victory in the US presidential election saw total assets at emerging markets-focused Aberdeen Asset Management PLC (LON:ADN) drop in its fiscal first quarter.

The FTSE 250-listed firm said net outflows across all its products totalled £10.5bn in the three months to December 31, which was only partly offset by £3.3bn of market gains.

Aberdeen said the bulk of the outflows were from lower margin products, which had been largely anticipated.

It added that a further £2.4bn was scheduled to be withdrawn from lower-margin portfolios this quarter.

The group’s overall assets under management at the quarter-end were £302.7bn, down 3% from £312.1bn at the end of September.

Election stall ..

Aberdeen’s chief executive Martin Gilbert said: " Investor sentiment had been improving steadily in the early part of the quarter, but stalled following the US presidential election result with investors putting asset allocation decisions on hold.“

However, he added: “Encouragingly, despite the market volatility our equity strategies produced strong returns for the year."

Gilbert continued: "While growing interest in a number of our strategies is likely to continue to be masked, in the short-term, by significant withdrawals by a small number of clients, I am encouraged by the progress being made.”

In a note to clients, Shore Capital analyst Paul McGinnis noted: “ This is now Aberdeen’s fifteenth consecutive quarter of net outflows, a cumulative figure of (£104.6bn).”

In early trading, Aberdeen Asset was the top FTSE 250 faller, shedding 3.6%, or 9.3p at 248.8p.

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Thu, 02 Feb 2017 08:59:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/172555/aberdeen-asset-hit-by-big-outflows-from-its-funds-in-the-wake-of-donald-trumps-victory-172555.html
<![CDATA[News - Aberdeen Asset Management reports large outflows following Brexit ]]> https://www.proactiveinvestors.co.uk/companies/news/128553/aberdeen-asset-management-reports-large-outflows-following-brexit-128553.html Aberdeen Asset Management PLC (LON:ADN) reported net outflows of £8.9bn during the quarter ending June, but said that equity investment performance was recovering well after the Brexit shake-up.

The investment management group said that the large outflow was offset by £17.5bn of asset appreciation, with £301bn assets under management at the end of the quarter.

The group said it expected some continuing volatility in UK and European equity markets as Brexit negotiations proceed.

“However, broader equity markets have been reasonably resilient,” added the group, “as have other asset classes. Against this backdrop, our commitment to controlling costs and driving efficiencies in our business is undiminished.”

Aberdeen said its businesses were well-positioned operationally both in the UK and in Luxembourg.

"There are many uncertainties out there, including the shape of the UK's future relationship with the EU, which might undermine market confidence. We remain well placed to take advantage, on behalf of our clients, of any weakness and will continue to focus on fundamentals rather than be distracted by market noise,” said chief executive Martin Gilbert.

Aberdeen imposed a week long suspension on its highly-exposed UK Property Fund following the referendum.

"For Aberdeen outflows from the property sector are a bit of a sideshow, as withdrawals are taking place across the board. At the moment for or every £1 in assets Aberdeen is attracting, £2 is walking out of the door, and that’s not sustainable for a fund manager in the long term," said laith Khalaf, senior analyst at Hargreaves Lansdown.

"The latest quarter did see some moderation in the pace of withdrawals from Aberdeen’s equity funds, though it’s difficult to get too excited by this when that still equates to over 3% of equity assets lost in just three months."

Shares ros ejust under 3% to 324.6p.

--UPDATE BROKER, SHARE PRICE--

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Mon, 25 Jul 2016 07:37:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/128553/aberdeen-asset-management-reports-large-outflows-following-brexit-128553.html
<![CDATA[News - Market welcomes Aberdeen Asset's Scottsh Widows wealth buy ]]> https://www.proactiveinvestors.co.uk/companies/news/53368/market-welcomes-aberdeen-assets-scottsh-widows-wealth-buy-63341.html Shares in fund manager Aberdeen Asset Management (LON:ADN) leapt higher afer it confirmed the acquisition of the wealth management arm of Scottish Widows from Lloyds Banking.

Lloyds will become a 10% shareholder in Aberdeen as a result of the £660mln all-share deal, which includes £100mln deferred consideration.

The deal increases Aberdeen’s funds under management to £350bn, though does not include the core life and pensions business of Scottish Widows.

Aberdeen added the deal would boost annual revenues of £234mln and “materially enhance” earnings in the first full financial year after completion.

Martin Gilbert, Aberdeen’s chief executive, said the deal would strengthen its investment capabilities, add new distribution channels and scale to the Aberdeen business across a range of asset classes while also setting up a strategic relationship with Lloyds Banking.

Aberdeen reported underlying profits rose by 39% to £483mln in the year to September, with the annual dividend also increased by 39% to 16p.

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Mon, 18 Nov 2013 10:27:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/53368/market-welcomes-aberdeen-assets-scottsh-widows-wealth-buy-63341.html
<![CDATA[News - Aberdeen Asset boosted by chirpier markets ]]> https://www.proactiveinvestors.co.uk/companies/news/35290/aberdeen-asset-boosted-by-chirpier-markets-42117.html  

Fund manager Aberdeen Asset Management (LON:ADN) reported better than expected profits in the first half of the year as investor confidence returned for risk assets.

Underlying pre-tax profit increased 14 per cent to £162.2 million, well ahead of the consensus forecasts for flat pre-tax profits of £143 million.

Martin Gilbert, Aberdeen's chief executive, said: "Global economic conditions remain uncertain and any recovery is still tentative."

Revenue increased seven per cent over the to £413.1 million. The company said investor appetite for risk assets was stimulated by recovering global financial markets during the period.

Gilbert added: “We are encouraged by the strong start to the current financial year but, as we have already seen during the first few weeks of April, global markets remain susceptible to periodic bouts of volatility.” 

Gross new business inflow was down to £18.2 billion, from £23 billion a year ago, but outflows were also down by a simlar amount to leave net outflows over the six months at £0.4 billion.

 

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Mon, 30 Apr 2012 10:37:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/35290/aberdeen-asset-boosted-by-chirpier-markets-42117.html
<![CDATA[News - Aberdeen Asset Management to acquire RBS ‘fund of funds’ business ]]> https://www.proactiveinvestors.co.uk/companies/news/9542/aberdeen-asset-management-to-acquire-rbs-fund-of-funds-business-11958.html FTSE250 listed investment group Aberdeen Asset Management (LSE: ADN) agreed to acquire certain fund management assets of the government supported UK bank, the Royal Bank of Scotland (LSE: RBS). Under the terms of the deal, Aberdeen will pay £84.7 million for an established ‘funds of funds’ business. In a separate statement, the asset management group also revealed a strong first quarter.

The proposed deal covers RBS’s ‘fund of funds’ management businesses covering long-only multi-manager funds and certain private equity and real estate ‘funds of funds’. RBS had announced plans to divest the business early in 2009.

"Aberdeen has been looking for some time to establish a high quality platform in the alternatives arena, and this exactly fits our requirements”, Aberdeen chief executive Martin Gilbert said, "The addition of this leading multi-manager and specialist alternatives resource will significantly strengthen our existing multi-asset and multi-manager capability.”

To finance the cash deal, Aberdeen also intends to raise £84.7 million through a placing of 84million new ordinary shares, representing 8.3% of the company’s current issued share capital.

The asset management group separately revealed a strong Q1 performance in its interim management statement, according to Aberdeen its first quarter has seen global markets continue in a more settled vein, which emerged from mid-2009.

In the three months ended 31st December 2009, the FTSE250 constituent substantially improved its gross new business wins with £9.6 billion, compared to £2.6 billion in the comparative period in 2008. “We have continued to improve the mix of our business with strong inflows into our higher margin equities funds”, Martin Gilbert said.

Assets under management actually fell by 1.4% to £144.1 billion with a net outflow of £2.6 billion during the period, however Aberdeen said its ‘fee mix’ remained advantageous due to comparative fee rates, with a considerably higher inflow into equity funds against the outflows from fixed interest and money market products.

Aberdeen said it remains confident in its financial strength, its diversified product and client base, and although it is possible that the economic and market recovery may encounter some difficulty in the short term, the company will continue its profitable growth.

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Fri, 08 Jan 2010 09:55:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/9542/aberdeen-asset-management-to-acquire-rbs-fund-of-funds-business-11958.html