Aberdeen continues to suffer outflows ahead of Standard Life merger

Aberdeen Asset Management has continued to see net outflows ahead of its merger with Standard Life.

The asset manager saw £2.9bn in net outflows in Q2, an improvement from outflows totalling £10.5bn in Q1.

It is its sixteenth consecutive quarter of net outflows.

Assets under management are now £308.1m.

Chief executive Martin Gilbert says the firm experienced net inflows into emerging market and diversified growth strategies, as well as the Parmenion platform.

“These together with favourable market conditions and the delivery of £70 million of cost savings have resulted in a healthy rise in revenues and profits.”

Revenue increased 10.6 per cent to £534.9 million and profits before tax increased 19.8 per cent to £195.2m.

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

“Our fund managers across asset classes will remain focused on investment fundamentals in helping our clients achieve their long-term financial objectives.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, says the firm’s outflows have been masked by buoyant markets and foreign exchange effects.

“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.”

Khalaf adds: “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.

The merger will allow the two companies to pool investment expertise, diversify their product ranges and access each other’s distribution networks. The increased scale of the combined group should also allow scope for lower fund charges, to help keep the passive wolf from the door.”