FTSE 100 fund management giant Standard Life Aberdeen sheds £16.6BILLION of assets but investors are cheered by share buyback plans
- Assets at £610.1 billion, compared with £626.5 billion for same point in 2017
- The firm has brought forward plans to return £1.75 billion to shareholders
- Shares in the fund manager rose 3.56 per cent to 317.5p following the update
FTSE 100 fund management giant Standard Life Aberdeen has seen £16.6 billion in net outflows of assets for the first half of the year, it revealed today.
Its assets under management stood at £610.1 billion, compared with £626.5 billion for the same point in 2017.
Pre-tax profit for the period was up 35 per cent year-on-year to £127 million.
Martin Gilbert (left) and Keith Skeoch, joint chief executives of Standard Life Aberdeen
In better news for investors, the firm also said it has brought forward plans to return £1.75 billion to shareholders, saying the first tranche of its share buyback programme would commence ‘in the next few days’.
The fund manager, which was formed out of the £11 billion merger of Standard Life and Aberdeen Asset Management last year, first announced the share buyback plan in May, after it agreed the sale of its European insurance business to Phoenix Group.
Standard Life Aberdeen said the first £175 million tranche of its share buyback programme will be enacted shortly, and that the sale to Phoenix will be completed in the third quarter of the year.
Shares in Standard Life Aberdeen rose 3.56 per cent to 317.5p following the update.
The company pointed the finger at political uncertainty and a tough marketplace as it sought to explain the big fall in assets under its watch.
Joint chief executives Martin Gilbert and Keith Skeoch said conditions for the asset management industry are ‘challenging’.
‘Our investment and distribution teams are winning new mandates and we have a good and diverse pipeline of business from around the world. We are actively taking steps to improve our investment performance in key areas and are encouraged by the impact of these initiatives,’ they added.
John Moore, senior investment manager at Brewin Dolphin commented: ‘These results from Standard Life Aberdeen demonstrate that it is a business in transition. It has gone through a great deal of change in the past year with the sale of its insurance arm to Phoenix, the IPO of HDFC Life and HDFC Asset Management in India, not to mention the ongoing integration of last year’s merger with Aberdeen.
‘The business is carrying the cost of that process, with net flows in negative territory for some time now and its share price under pressure.
‘Overall, it’s another mixed bag for Standard Life Aberdeen, but the share price discounts much of the bad news and could recover as we move closer to the proceeds of the Phoenix deal being returned to shareholders.’