Standard Life Aberdeen joint chief executive Martin Gilbert told CNBC in an interview he believes the merged firm is “a couple of years ahead of everyone else” in preparing for the “headwinds” that will hit asset managers going forward.
Asked about the performance of Standard Life Aberdeen since the merger of the firms — with its stock price down more than 20% — and his message to shareholders, Gilbert said: “The company is in great shape.
“I mean we’re sitting here with after selling the life company.
“We’re sitting there with close to five billion pounds of cash, five billion pounds of listed equities.
“So we’ve got probably one of the strongest if not the strongest balance sheet in the world in asset management.
“But the market’s tough.
“So I’d look at … how we perform relative to other asset managers and we’re down … this year obviously than some of the others.
“I think the great news is we think we’re a couple of years ahead of everyone else and having seen this tough times for asset managers, fee income going down … passive attacking the active fund managers.
“So hence the reason January 2017, Keith and I decided let’s merge these businesses … form a bigger company so that we can withstand these headwinds going forward.
“It’s going to be a tough time for asset managers.”
Asked about costs and synergies, Gilbert said: “We’re very satisfied … I think we’ve achieved what we wanted 350 million; we will achieve our 350 million.
“We may achieve slightly more than that.
“So we’re very satisfied with that.
“I mean clearly we’d love the share price to be higher but I’m a great believer in not worrying about the share price, worry about the business and what you’re doing and the share price will follow is the adage I’ve always sort of tried to follow.
“And I believe that that will happen when people realize the value every single analyst virtually has us on a buy because of the unrealized value.
“Now we’ve got to realize it.”
Gilbert said he expects “a deal” to be trashed out on Brexit in the first quarter of next year.
“My personal view is that there will be a deal,” said Gilbert.
“We may not like the deal but I think the prime minister will go to parliament sometime in the first quarter of next year and say look this is the deal, you either accept this or you vote for no deal.
“It must be in Europe’s interests to negotiate a deal because of the balance of trade surplus the Europeans have with the UK so it doesn’t make sense not to have a deal for Europe.
“Financial services to a certain extent can look after themselves and the government.
“So we’ve already prepared for a hard Brexit.
“We’ve opened in Dublin. Barclays have opened in Dublin.
“All of us have actually pushed the contingency back and actually have actually done it now so financial services are probably okay.”
Asked about a no deal scenario, Glbert said: “Yeah. Even in a no deal because we’ve really planned for a no deal and that we’ve really moved our operations from London to either Dublin or Luxembourg.
“I think the other thing to remember about asset management because it was as if we were never in Europe because we always ran our funds businesses from Luxembourg and sold funds to the UK from London.”