Turmoil hits Aberdeen’s fund flows

INVESTORS pulled a net £2.8bn from Aberdeen Asset Management in the final three months of last year as fears mounted over the Eurozone crisis.

Shares in the Granite City firm slipped 1.65 per cent to 226.1p yesterday after it said withdrawals had quickened since the £1.7bn reported in the third quarter.

But Aberdeen is not alone in suffering as global market swings prompt investors to switch to more cautious strategies – Man Group announced on Wednesday it was deepening its cost-cutting programme.

Yesterday Aberdeen said its outflows had been largely limited to lower margin strategies such as fixed income although it was also hit by the loss of one global mandate.

Chief executive Martin Gilbert said: “New business flows remain focused on our higher margin pooled funds with outflows largely limited to lower margin strategies. Our investment performance is robust in the face of ongoing macroeconomic instability.”

Total assets edged up two per cent over the three months to £173.9bn, however, helped by a combination of market gains, performance and currency moves.

Clients continue to buy Aberdeen’s Asian and emerging market debt funds, which have higher margins.

Analysts were upbeat, hailing Aberdeen’s performance in a tough market. Arun Melmane at Investec Securities said: “Aberdeen... is well placed relative to others in the sector with strong current fund performance, controlled costs, strong cash conversion ratios and a flexible balance sheet.”

Meanwhile Asian investment strategist Peter Elston has been appointed to the new position of head of Asia Pacific strategy and asset allocation.