Aberdeen in fees boost as funds grow

ABERDEEN Asset Management pleased the market yesterday with a better-than-expected jump in funds under management and higher fee earnings over the past quarter.

The fund manager’s assets hit £185.8bn at the end of June, up 2.5 per cent in the past three months as it added £10.9bn gross new funds.

Analysts also welcomed the news that the biggest beneficiaries of new capital flows were equity and fixed income funds that generated the highest margins, giving Aberdeen a healthy revenue stream.

Aberdeen’s chief executive Martin Gilbert said flows into higher margin products had more than offset redemptions in revenue terms.

Its high-margin pooled funds saw a £1.6bn net inflow in the quarter, while £0.9bn of net outflows from segregated mandates meant the revenue mix shifted strongly towards its high-margin products, adding £15m in annualised fee income.

Outflows also included a £0.7bn withdrawal from a fixed income fund Aberdeen said it chose to close “because of the very low fee margin”.

Overall net fund inflows rose to £0.7bn from £0.3bn a year earlier.

“Fixed income performance has continued to exceed the relevant benchmarks and several of our strategies are now ahead of benchmark over the key three-year period; others remain on track to do so later in 2011,” Aberdeen said.

Its equity and property products saw healthy inflows, it added, while the company’s overall income, margins and cashflow were all strong and it remained bullish on the outlook.

“Markets are likely to remain somewhat volatile in the near term but we remain confident that we can deliver further organic growth,” it said.