Shares in Abrdn plunged today after the asset manager reported a £320m loss and a sharp slide in assets under administration in the first six months of the year amid a turbulent period on global markets.
In a trading update on its first half trading, the FTSE 100 investor said it had swung into the red from a profit of £113m in the same period last year.
Nervous investors pulled cash from funds as wild swings rocked their investments, with total net outflows totalling £35.9bn. The volatility has also hammered the value of Abrdn’s total assets under management which slid to £508bn at the end of the first half, well below a company-compiled analyst poll consensus of £522bn and down from £542bn at the end of last year.
Boss Stephen Bird said the firm had been a turbulent start to the year for the firm.
“The half year Group results largely reflect the challenging global economic environment and market turbulence,” he said in a statement.
“When I became CEO in late 2020 I said that we would pursue a strategy of diversification by refocusing our Investments business in to areas of strength, where we have scale and that lean into global growth trends and also significantly expand our reach into the higher growth UK wealth market.”
Shares in the firm plunged in early trading and closed down over five per cent.
Bird said he expected the outlook to lighten in the second half of the year however, as markets pick up and its acquisition of retail trading platform Interactive Investor begins to bolster revenues at the firm.
“Looking forward into the second half, we will see revenue tailwinds from a full six months’ contribution from ii and from performance fees,” Bird said.
“We are expecting continued positive flows in Adviser and Personal Wealth. Markets have shown some signs of improvement in July and if this trend continues it will provide a further revenue tailwinds.”
Analysts warned that the investor needed a major turnaround if it was to avoid being dumped out of the FTSE 100.
“Today’s mixed set of results from Abrdn confirm the tricky position the company finds itself in,” said John Moore, senior investment manager at Brewin Dolphin.
“After a challenging year or so, between market turbulence and a restructuring of its business, Abrdn finds itself at the edge of the FTSE 100 having lost around 30 per cent of its value since the beginning of 2022.”
Moore said the firm “seems certain” to be relegated from London’s flagship index unless it can “pull something out of the bag in the near-term”.