SHARES in abrdn plunged by more than four per cent this morning after the Edinburgh-based asset management giant fell short of profit expectations and reported a rise in outflows from its investment funds in the first half of the year.

The company cited the “challenging global economic environment and market turbulence” as it recorded total net outflows of £35.9 billion in the first half, compared with £5.6bn in the first half of 2021.

And the investment giant, which changed its name from Standard Life Aberdeen in 2021, warned that the current market uncertainty means that its “ambitions for revenue growth and improved cost/income ratio are likely to take longer than originally expected”.

Assets under management narrowed to £508 billion from £542bn, which abrdn said reflected lower markets and the final Lloyds Banking Group tranche withdrawal of £24.4bn. The latter followed the end of abrdn’s contract to manage £109bn of Scottish Widows pension assets for Lloyds.

The outflows were partially offset by the inclusion of assets following abrdn’s acquisition of Manchester-based Interactive Investor, a subscription-based investing platform, for £1.5bn in December.

Chief executive Stephen Bird said: “The half-year group results largely reflect the challenging global economic environment and market turbulence. When I became CEO in late 2020 I said that we would pursue a strategy of diversification by refocusing our investments business into areas of strength, where we have scale and that lean into global growth trends and also significantly expand our reach into the higher growth UK wealth market.

“We are doing exactly that and the addition of interactive investor transforms our UK retail presence and future revenue streams. The strength of our balance sheet means that we can continue to invest and reward shareholders.”

abrdn reported that fee-based revenue had dipped by 8% in the first half to £696m, while adjusted operating profit was 28% lower at £115m, “driven by market movements”. Analysts had pencilled in operating profits of £130m.

The company booked net outflows of £3.8bn, compared with £1.9bn in the first half of 2021.

Shares were trading at 165.85p, down 7.1p, just after midday.