Abrdn PLC (LSE:ABDN) plunged into the red in 2022 as costs rose, revenues fell and almost £40bn of net funds were withdrawn from the business.
Total assets under management (AUM) dropped £42bn to £500bn as the fund manager’s investment arm also struggled.
Abrdn said AUM would have been even lower without the contribution from the recent acquisition of wealth platform interactive investor (ii).
Losses for the year hit £615mln against a profit of £1.12bn previously, which was attributed to higher costs, currencies, acquisitions, weak share prices and impairments.
Stripping out the one-offs, underlying profits fell by 19% to £263mln.
ii’s performance was a bright spot with operating revenues up 38%, operating profits 109% ahead and customers numbers up by 3%.
The dividend for the year was unchanged at 14.6p.
Stephen Bird, chief executive, put a brave face on the numbers.
“We are building a stronger abrdn. As we exit year two of our three-year strategic plan, the structure of our group is now broadly set," he said.
“Adviser and Personal, which benefited from the acquisition of ii, both delivered increased revenue and profits. This provided an important offset to the impact of market conditions on our Investments business."
Separately, abrdn announced it had agreed to sell its discretionary fund management (DFM) business to LGT for £140mln.
The sale involves the transfer of approximately £6.1bn in assets under management and approximately 140 employees.
Abrdn said that to succeed in the DFM market it would need to build a much greater scale but its focus is on integrating recent acquisition ii.
The group’s Managed Portfolio Service business, which is currently part of the DFM business, is being retained, said the wealth manager, as it is better aligned to the group strategy and is a part of the UK personal investment market operation.
Bird added: "We are establishing one of the UK's leading personal wealth businesses, and this deal represents an important step forward in our strategy to focus on our high-growth, platform-led businesses."
Earlier this month, there were reports abrdn is also mulling the sale of its private equity arm for around £250mln.
LGT is a private banking and fund management group owned by the Liechtenstein royal family.
Prince Max von und zu Liechtenstein, LGT’s chairman, said: “The business’ strong investment performance and ESG strategy make it a perfect fit”.