Aberdeen Standard assets fall £11bn to £570bn

Keith Skeoch, left, and Martin Gilbert, co-CEOs of Standard Life Aberdeen

Standard Life Aberdeen said assets under management at its fund management business Aberdeen Standard Investments fell £10.9 billion to £569.7 billion in the nine months to September 30, 2017.

Standard Life Aberdeen was created by the £11 billion merger of Scottish investment giants Standard Life and Aberdeen Asset Management earlier this year.

Standard Life Aberdeen said total assets under management and administration (AUMA) was “stable” at £646.2 billion, down slightly from £647.6 billion at December 31, 2016.

Total outflows rose to £23.8 billion from £23 billion for the same period in 2016.

“Where we’ve seen probably the effect of the merger is that people are not funding things yet, they are waiting to see how the funds settle down,” said co-chief executive Martin Gilbert on a call with reporters.

The numbers were contained in a trading statement covering the nine months to September 30 — the first statement as a combined business.

Standard Life Aberdeen has said it might sell its £16 billion book of annuities that are closed to new customers, but co-chief executive Keith Skeoch said no decision had been made.

Gilbert and Skeoch said in a joint statement: “Standard Life Aberdeen is making good progress towards creating a world-class investment company.

“The integration of Aberdeen Standard Investments is on track and we are delighted with the way the teams are coming together to deliver for clients.

“While the combined business has experienced net outflows, these were in line with our expectations given the asset classes affected and the structural outflows from our lower margin mature books.

“Nevertheless the momentum in our business is good with £58.6 billion of gross inflows during the period.

“We continue to innovate, launching new funds with strong backing from clients and winning new mandates across a wide range of investment strategies.

“Standard Life, our pensions and savings business has had record flows year to date demonstrating further strength and diversity of our business.

“The successful IPO of HDFC Life in India and our recent registration as a private securities fund manager in China, have further strengthened our business.

“We remain confident of delivering long-term value for our clients, our people and our shareholders.”

In its full statement, Standard Life Aberdeen said: “Within total AUMA, Aberdeen Standard Investments assets under management were £569.7 billion (31 December 2016: £580.6 billion) while Standard Life Pensions and Savings assets under administration increased to £182.3 billion (31 December 2016: £171.6 billion)

“Within our growth channels, net outflows have reduced to £10.6 billion (2016: £11.3 billion).

“Aberdeen Standard Investments growth channel net outflows increased by £1.5 billion with an increase of £4.5 billion in outflows from our institutional channel, where market conditions remain challenging, partly offset by a £3.0 billion improvement in outflows from the wholesale channel.

“We attracted record growth channel net inflows into Standard Life Pensions and Savings which increased by £1.8 billion (40%), further demonstrating the benefits of diversification as well as our investment company business model.

“Combined AUA across our retail platforms, Wrap and Elevate, now exceed £50 billion, benefiting from industry-leading net inflows of £5.4 billion.

“In addition, Parmenion net flows amounted to £1.0 billion with AUM now £4.0 billion. Within our mature books of business net outflows were stable at £12.8 billion.

“We are seeing good momentum across a wide range of products with gross inflows across the group of £58.6 billion (2016: £60.0 billion).

“We continue to see particularly strong demand for emerging market debt and multi-asset solutions such as MyFolio and our diversified growth funds.

“We have also continued to innovate, launching a number of new funds including the Global Equity Impact Fund, the European Logistics Income investment trust and the Secured Credit Fund – all designed to meet the growing demand for ‘new active’ investment solutions.”