Aberdeen slumps after $11.2 billion outflows

Firm with Toronto office takes a hit from weakness in emerging markets and reports drop in first half profits

Aberdeen slumps after $11.2 billion outflows
Aberdeen Asset Management Plc, which has offices in Toronto, slumped to its lowest level since 2008 after its clients withdrew £7.6 billion ($11.2 billion) of net money from its equities and fixed income funds in the first three months of 2016, reported Bloomberg.

In a statement, Aberdeen reported that the firm suffered total redemptions amounting to £16.7 billion in the six months to the end of March, compared to £11.3 billion one year earlier.

The outflows drove underlying pre-tax profit down 40 per cent to £162.9 million and cut net revenue by 20 per cent. It also resulted in an 11 per cent drop of the firm’s assets under management to £292.8 billion. The company left its interim dividend unchanged at 7.5 pence per share.

Yesterday in London trading, shares were down as much as 9.9 per cent at 269.70 pence - making it at one point the worst performer in the FTSE 350 Index. The firm has suffered more than two years of withdrawals as investors fled from emerging markets. In March, the firm was pushed out of the FTSE 100 Index of the largest British companies after its stock was sold off during a market slump.

In an interview with Bloomberg Television, Martin Gilbert, Aberdeen’s chief executive officer, said he has started to see a “light at the end of the tunnel” after the firm received its first quarterly inflows into emerging markets equities. Gilbert also said in the interview that “We [Aberdeen] are strong financially with over £400 million cash on the balance sheet,” adding, “We can survive as a business very easily; we just have to wait for emerging markets to come in favour.”