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Aberdeen assets down over quarter; reports outflows across all strategies

Martin Gilbert, CEO, Aberdeen Asset Management
Aberdeen CEO Martin Gilbert

Aberdeen Asset Management reported £302.7 billion ($372.4 billion) in assets under management as of Dec. 31, down 3% from three months earlier, with net outflows across all strategies.

Assets increased 4.2% over the year ended Dec. 31.

Aberdeen recorded net outflows of £10.5 billion over the quarter, primarily out of equity strategies, said its latest trading update. Flows were partially offset by £3.3 billion in market gains and foreign-exchange appreciation.

For the three months ended Sept. 30, net outflows totaled £7.2 billion and the quarter ended Dec. 31, 2015, saw net outflows of £9.1 billion.

The bulk of net outflows over the quarter ended Dec. 31 were “largely low margin and anticipated,” with a total £4.2 billion of active equity redemptions by a sovereign wealth fund and a U.K. wealth manager. Aberdeen also saw “anticipated structural outflows from certain institutional clients,” and a further £2.4 billion is set to be withdrawn from lower-margin portfolios in the first quarter of 2017.

Equity assets fell 6.7% in the quarter to £83.1 billion, with net outflows totaling £6.6 billion. Fixed-income assets fell 6% over the period to £65.8 billion, with £1.1 billion of net outflows. The firm also withdrew from the management of U.S. core and core-plus allocations in its U.S. fixed-income business over the quarter, focusing on U.S. credit and total return bond strategies. This reduced fixed-income assets under management by £2.2 billion in the quarter, and Aberdeen said it expects a further £1 billion reduction in the early part of this year.

Multiasset strategies were flat over the quarter, with net outflows of £1.4 billion and £89.9 billion in assets. Real estate assets also fell, by 3.2% to £17.9 billion at Dec. 31, with £700 million in net outflows.

Despite net outflows of £200 million, alternatives assets under management grew 3.2% to £22.5 billion. Quantitative strategies recorded net outflows totaling £500 million in the quarter, but assets grew 3.1% to £23.5 billion over the quarter.

“Investor sentiment had been improving steadily in the early part of the quarter, but stalled following the U.S. presidential election result with investors putting asset allocation decisions on hold,” said Martin Gilbert, CEO, in a statement accompanying the update. “Encouragingly, despite the market volatility our equity strategies produced strong returns for the year.”

He added that growing interest in a number of the firm's strategies “is likely to continue to be masked, in the short term, by significant withdrawals by a small number of clients.”