By Mark McSherry
Abrdn said on Thursday its assets under management and administration (AUMA) rose 2% YTD to £507 billion, reflecting positive markets and net inflows at its Interactive Investor business. However, Abrdn shares fell about 8% as it revealed continued outflows in its Investments business that were “driven by equities and Insurance Partners” with a “performance transformation ongoing.”
The firm also said actions were being taken to address continued outflows in its Adviser business “with clear focus on service.”
In a Q3 2024 AUMA and flows trading update, the Edinburgh investment group reported strong organic growth YTD at Interactive Investor with customers up 6% to 430,000 and AUMA up 13%.
Abrdn’s £3.1 billion of net outflows in the third quarter were less than half the £6.7 billion of net outflows in the same period last year, but some analysts said the asset manager missed forecasts.
Abrdn CEO Jason Windsor said: “Today’s update shows strong performance in parts of our group; however, it also underlines the importance of delivering on the priorities I set out at the half year.
“I’m pleased with the continued growth in interactive investor; meanwhile, there are challenges to overcome in Adviser, where we aim to return to being the platform of choice for clients.
“In Investments, we need to do more to capitalise on our strengths and improve performance and flows, particularly in equities.
“We have strong, scale positions in attractive markets, and each of our businesses has headroom to grow. Our priorities remain to transform performance, improve the client experience, and strengthen our talent and culture.
“We have plans in place to address our challenges and our transformation programme is on track. While there remains much to do, I am confident that we have great talent and we can make further progress towards profitable and sustainable long-term growth, benefiting our shareholders, clients, and colleagues.”
In its Investments business, Abrdn said assets under management (AUM) increased marginally YTD to £368 billion “with positive market movements offset by net outflows and the sale of the private equity business.” It said net outflows YTD were lower at £4.5 billion. Excluding the sale of the private equity unit, AUM were up 2% YTD.
AUM in Institutional & Retail Wealth in the quarter was broadly stable, with positive market movements offset by net outflows of £2.4 billion. “Net outflows were driven by equities, which continue to be affected by challenging conditions for flows across Asia and emerging markets, as well as switches to passive and quantitative strategies,” said Abrdn.
“Our real assets business attracted net inflows in the quarter of £1.0bn,” said Abrdn. “This included the launch of a £0.4bn European concession infrastructure fund and the extension of our residential real estate capabilities to the Japanese market with a £0.6bn mandate for an existing client.
“Insurance Partners AUM was up slightly in the quarter and by 2% YTD. Net outflows were £1.1bn in the quarter, principally reflecting run-off in the heritage business.”
On its Adviser business, Abrdn said: “Taking action across the board to improve net flows, with improved service focus …
“AUMA up 2% YTD to £75.1bn with stronger markets offsetting net outflows … Q3 2024 net outflows of £1.0bn remained elevated, despite a modest uptick in new business following the re-pricing announced in May.
“As set out at half year, actions are in train to address net outflows, including further investment in technology, strategic re-pricing, proposition upgrades and strengthening the Adviser leadership team. Service remains at the heart of our proposition, so we are redoubling our efforts in this regard and adding resource to deliver a better experience for our clients.
“The full benefits of these actions will take some time to realise, but our priority remains to return to net inflows as soon as possible.”
On Interactive Investor (ii), Abrdn said: “Sustained strong organic customer and AUMA growth …
“Consistent organic customer growth in Q3, with total customers of 430k, up 6% YTD and up 2% in the quarter. Within this, SIPP customers grew to 76k, up 22% YTD and up 5% in the quarter.
“AUMA up 13% YTD to £74.5bn, driven by continued strong growth in net inflows and positive markets.
“Net inflows in the quarter of £1.2bn, up from £0.6bn in Q3 2023, with net inflows of £4.3bn YTD already 48% higher than the whole of 2023.”