Abrdn hit by fund outflows

The asset management company formerly known as Standard Life Aberdeen, Abrdn (ABDN), saw its shares crater by more than 8 per cent in early trading on release of these results as the giant asset manager reported another half of large outflows – this time of more than £5.2bn as clients pulled funds. This left total assets under management at the end of the half at £496bn. Abrdn is staring at another year of outflows, which would mean that, since its merger with Standard Life in 2017, the company will have registered seven consecutive years of fund outflows.

Overall, the result was somewhat unexpected as the general trend for active asset managers throughout the summer results season was for a gentle return to fund inflows and cautious asset growth. Abrdn’s performance is out of tune with more obviously troubled companies, such as Jupiter Fund Management (JUP), which enjoyed a positive half after registering a small net inflow of funds of £23mn.

Abrdn’s problems reflect its complicated structure, which the current management team has been trying to simplify and diversify over the past two years – most notably, and expensively, with the £1.5bn purchase of share trading platform Interactive Investor in late 2021. That process has not been helped by a string of senior departures – Abrdn has recently lost its senior head of asset management for the US and EMEA, as well as its head of real estate.

Numis analysts suggest more radical action will be needed, such as the break-up or complete sale of the group before real value is unlocked for shareholders. The broker forecasts an expensive-looking price/earnings ratio of 15 for 2023. With few positives to mention, the outlook remains cloudy. Sell.

Last IC view: Sell, 212p, 28 Feb 2023