Emerging markets boost for Aberdeen

Group Business Correspondent

Tuesday 25 September 2012

ABERDEEN Asset Management increased the profitability of its mix of investment mandates in the two months to August 31, when the Scottish investment firm continued to win more higher margin work, although it suffered a small overall net outflow of business.

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Finance director Bill Rattray said directors were pleased with the progress the company made during the two months, when it won strong flows of new business into profitable areas like managing emerging markets and Asia Pacific equities.

The £2 billion net inflows of new equities business were offset by the £2.1bn net loss of mandates in other areas, including some lower margin fixed income management work. This resulted in a £100 million net outflow of new business.However, the company expects the additional revenue generated by the higher margin mandates won in the latest period will exceed the income lost in lower margin areas by around £10m annually.Mr Rattray said: "It would always be nice to see some of the outflows being slightly smaller but underneath it all it has got the right feel to it."We are still seeing strong inflows into higher margin areas. Even in fixed income although we had net outflows in the period underneath that we are seeing pretty healthy interest in emerging market debts."The company increased funds under management by 1% during the period, to £184.3bn, up £1.6bn on the £182.7bn recorded at the end of June. This also reflected a £1.7bn increase in the market value of the assets under management and foreign exchange movements. In an update on trading ahead of the group entering a closed period pending the announcement of annual results, chief executive Martin Gilbert said: "With uncertainty surrounding the global macro-economic situation our disciplined and fundamental approach to investing continues to attract flows from a wide range of clients from around the world. "Our strong performance across a variety of capabilities and products means we remain well positioned to meet the needs of investors in a constantly changing environment."The company is taking a cautious view about the outlook for equities.Mr Rattray indicated the company's recent success may result in increased payouts for investors in future.Noting that the company has said it wants to grow its balance sheet, Mr Rattray said: "We expect to have it in the shape we want to have it in by the end of December this year. "As we move forward beyond that we will look at what we do with surplus cash. Certainly we're keen to pay a rising dividend but we will take that one forward properly in 2013."Asked if acquisitions were on the agenda, Mr Rattray said: "There is always the possibility perhaps of small infill acquisitions, but that would be the order of things."

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Emerging markets boost for Aberdeen

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