Abrdn web outflows close to £14bn as fund supervisor ups dividend

Abrdn prospects continued to drag billions from the funding group final yr amid a difficult financial backdrop.

The energetic asset supervisor, rebranded from Standard Life Aberdeen three years in the past, reported web outflows of £13.9billion in 2023, in comparison with £10.5billion the earlier yr.

Although the corporate famous decrease consumer redemptions, gross flows declined by £9billion to £50.3billion as market situations discouraged buyers from injecting contemporary capital. 

As a outcome, Abrdn’s web working income dropped by 4 per cent to £1.4billion, with its funding administration enterprise seeing the most important fall in turnover.

The Edinburgh-based agency reported simply £6million in pre-tax losses, towards £612million for 2022, primarily on account of decrease impairment and restructuring prices and better earnings at its monetary recommendation and Interactive Investor segments.

Adjusted working earnings got here in at £249million, in-line with forecasts, however down from £263million in 2022. 

The group additionally warned that margins may come below stress in 2024 as bigger buyers shift their consideration to cheaper passive methods. 

It stated: ‘Within Insurance particularly, we count on the asset rotation from energetic fairness and glued earnings methods to passive quantitative methods skilled in 2023 to proceed into 2024. 

‘This along with associated pricing modifications, could end in an additional contraction of income margin.’

Abrdn additionally saved its shareholder payouts secure at £600million, partly by offloading its stake in Indian life insurer HDFC.

Abrdn shares rose 3.6 per cent to 167.3p on Tuesday morning, however they’re nonetheless considerably beneath their worth when Standard Life and Aberdeen Asset Management merged in 2017.

Under Stephen Bird’s management, the corporate is executing a turnaround programme through price reductions and asset disposals, largely aimed toward reviving its investments division.

Last yr, Abrdn bought its European-headquartered personal fairness enterprise to Patria Investments for £60million and its US personal markets arm to HighVista Strategies.

It moreover lowered prices inside its investments arm by £102million, surpassing a £75million financial savings goal.

And in January, Abrdn introduced a brand new goal for not less than £150million in additional financial savings by the tip of 2025, which is able to embrace chopping round 500 jobs or 10 per cent of its workforce.

Bird stated: ‘Our stability sheet stays robust, which allows us to fund our price transformation whereas persevering with to strategically put money into progress areas and preserve our dividend.

‘There is critical work forward, however we’re assured we shall be profitable in delivering future progress.

As a part of its growth efforts, Abrdn acquired Interactive Investor in March 2022 because it sought to capitalise on the pandemic-induced growth in retail investing.

Yet the group warned on Tuesday that it anticipated continued headwinds ‘from altering consumer demand and preferences’ within the yr forward.

John Moore, senior funding supervisor at RBC Brewin Dolphin, stated: ‘Financial companies markets are altering extra quickly than ever and, with that, Abrdn has been in roughly a continuing state of flux for the previous few years.

‘This difficult backdrop is mirrored in at the moment’s blended outcomes, which has some indicators of vibrant spots but in addition highlights areas for enchancment.’