ABERDEEN Asset Management has revealed ambitions to ramp up its presence in the UK retail investment market after a 14% rise in first-half profits pushed its shares to their highest price for more than a decade.
Aberdeen posted underlying earnings of £162.2 million, well ahead of City expectations for the six months to March 31.
Revenues were up 7% at £413.1m.
It was boosted by net inflows of £2.4 billion for the first three months of 2012 and a continued rise in fee margins.
The surge in new business kept the net outflow for the six-month period to £400m, which was outweighed by investment performance, and took assets under management to £184.7bn from £169.9bn at the end of September.
Much of the new money headed into Aberdeen's equity funds, notably global, emerging markets and Asian Pacific mandates as well as higher margin emerging market debt and Asia Pacific fixed income products.
This helped Aberdeen to a 3.4 basis point rise in its average fee margin to 43.9 basis points.
Aberdeen's shares climbed 9.5p or 3.5% to 283.5p, their highest price since November 2001. They have gained more than 30% this year.
Chief executive Martin Gilbert said: "Global economic conditions remain uncertain and any recovery is still tentative.
"Nevertheless we remain confident that our long-term investment philosophy and process, coupled with the scale and diversity of our business and financial strength, leave us well placed to meet the expectations of our investors."
Finance director Bill Rattray said he believed the company could continue to see margins expand. But he added: "I would expect the rate of growth to slow a bit."
Such is the confidence of the firm that Aberdeen is plotting a drive into the UK retail market which it has largely ignored since becoming embroiled in the split capital investment trust crash in the early years of the millennium.
Mr Rattray told The Herald: "With the benefit of hindsight we have probably been a little bit too focused purely on the institutional [market], particularly for the past four or five years.
"We probably now have to begin to focus on the wholesale market perhaps a little more."
Aberdeen is aiming to break into the top ten of UK retail fund managers, from its current position of 14th.
This would require overhauling the likes of Capita Financial Managers, BlackRock and First State Investments and adding some £2bn to retail assets under management.
Mr Rattray said the decision of the fund management arms of insurers such as Scottish Widows and Aviva to scale back their active fund management operations could drive some to rival funds houses like Aberdeen.
Aberdeen said it has managed to slow inflows into its popular emerging markets equity product, which faces capacity constraints, by asking financial advisers to remove it from recommendation lists.
Mr Gilbert flagged up potential future capacity issues for its global equities range too.
Aberdeen also said it has raised $242m (£149m) for an Asia Pacific property fund of funds, and has been appointed for two new mandates, which should add around $200 million for assets in coming months.
Mr Rattray said Aberdeen still thinks there could be "short-term surprises" in financial markets and remains "cautious".
But he added: "It is certainly healthier than it was."
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