RNS Number : 3683Z
Aberdeen Asset Management PLC
18 July 2008
ABERDEEN ASSET MANAGEMENT PLC
INTERIM MANAGEMENT STATEMENT - 3 MONTHS TO 30 JUNE 2008
Highlights
* Increase in assets under management to £113.7bn
* £5.6bn of new business won during the quarter
* Acquisition of Goodman Property Investors completed
* £57m of annualised cost savings identified
Martin Gilbert, Chief Executive of Aberdeen, commented:
"Despite these challenging market conditions, we continue to win new business across the
Group's core asset classes and increase assets
under management. At the same time, we are focusing on increasing our efficiency as a business
and have identified £57m of annualised cost
savings.
"Whilst market conditions may continue to be volatile, our global presence, breadth of
products, quality of people and strong balance
sheet all ensure we are well positioned to continue to make progress."
The equity, bond and property markets in which Aberdeen operates have continued to be
volatile and are likely to remain so in the near
future. Despite this unhelpful background, the Group has continued to attract healthy levels
of new business, albeit redemptions have also
continued at higher levels than experienced in more settled market conditions. Taking into
account the assets added by the acquisition of
Goodman Property Investors which was completed in the quarter, assets under management ("AUM")
grew to £113.7 billion at 30 June 2008
(£107.3 billion at 31 March 2008). The principal changes in AUM in the quarter are shown in
the following table.
Equities & fixed income
£m Property Total
£m £m
AUM at 31 March 2008 90,112 17,175 107,287
Corporate acquisitions - 7,315 7,315
Net new business 337 540 877
Market movements, performance (1,396) (396) (1,792)
& FX
AUM at 30 June 2008 89,053 24,634 113,687
Gross new business wins for the quarter totalled £5.6 billion, compared to £6.4 billion
for the same quarter last year, bringing the
total for the nine month period to 30 June 2008 to £16.5 billion (2007 - £17.3 billion). A
further £2.5 billion of new mandates had been
awarded to the Group at 30 June 2008 but not funded at that date. Redemptions have continued
to run at approximately 50% higher than last
year's levels as many investors have reduced risk appetites in current market conditions.Assets withdrawn by clients in the quarter
totalled £4.7 billion (2007 - £3.1 billion), bringing total redemptions for the nine month
period to 30 June 2008 to £15.1 billion (compared
to £10.1 billion for the nine month period to 30 June 2007). An analysis of the new business
figures for the 9 months to 30 June 2008 is
provided at the end of this statement.
Our investment teams have continued to pursue the disciplined bottom up approach to
security selection which is at the heart of the
Group's investment philosophy and process. The key equity disciplines of Asia Pacific, global
emerging markets and global equities have
continued to deliver excellent performance and, with the relevant benchmarks having given up
much of the short term gains they enjoyed in
2007, these strategies are once again ahead of benchmark over both the long term and the short
term. Our fixed income performance has
recovered strongly in the quarter to June, following a difficult first half year in which
credit spreads widened significantly. As we have
reported previously, we have always had negligible exposure to the more toxic instruments in
the fixed income market and the nature of the
portfolios we manage is such that our investors will be able to sit out the turbulent markets
and await the reversal of the mark-to-market
declines which have impacted on performance in 2007 and early 2008.
We completed the acquisition of Goodman Property Investors ("GPI") on 30 May, adding some
£7.3 billion of property AUM. The integration
of the GPI business with the Group's existing property division is proceeding in accordance
with the timetable and we expect the GPI team to
transfer to our London office towards the end of 2008. Integration of the DEGI property fund
management business, which was acquired earlier
in the year, is also proceeding according to plan.
We reported at the time of our interim results that we were in the process of implementing
certain cost cutting measures and that we
expected to identify further savings in due course. We have now identified £27 million of
annualised savings within the fund management
division and £30 million in the property division, including approximately £7 million of
synergies to be derived from the DEGI and GPI
acquisitions. There will be some consequential reduction in annualised income from elimination
of low margin property business, but we
expect the net annualised benefit of these cost savings to be approximately £40 million
before tax. We expect approximately £3 million of
net benefit to be reflected in the second half of the current financial year, rising to
approximately £35 million for the financial year to
30 September 2009, with the full annualised benefit reflected in subsequent years. One-off
costs associated with these cost savings are
expected to be approximately £12 million.
We decided in October 2007 that it was in the best interests of clients and the Group to
close temporarily a number of fixed income
strategies because of the large number of active searches we were already pursuing. Since
October we have absorbed a significant proportion
of the new business pipeline that had built up, with £1.4 billion of our reported inflows for
the 9 months to 30 June arising from
conversion of the pipeline in these strategies. We intend to reopen all these strategies so
that institutional investors will once more have
access to our highly regarded fixed income team whilst also maintaining the high level of
service our clients have come to expect. We
believe that this reopening is timely given the current market turmoil and the longer term
opportunities now available.
We have also been considering the volume of searches we are pursuing for global emerging
market ("GEM") equity mandates and we have
decided that we should undertake a temporary close to new segregated business with effect from
31 July. This closure will enable us to
concentrate on converting the pipeline of potential new GEM equity business whilst ensuring
that existing client requirements, in terms of
strong performance and already high service standards, are not compromised by the take-on of
new business. The closure will not affect
potential investment in our GEM equity pooled funds, nor will it prevent us accepting any
additional investment from our existing clients.We will review this decision on an ongoing basis.
It is likely that market conditions will remain difficult in the coming months but we
remain confident of our ability to add further
profitable new business across our diverse range of equity, fixed income and property
capabilities.
For further information, please contact:
Aberdeen Asset Management PLC
Martin Gilbert, Chief Executive 020 7463 6000
Maitland 020 7379 5151
Neil Bennett 07900 000777
Charlotte Walsh 07813 889660
ASSETS UNDER MANAGEMENT AT 30 JUNE 2008
30 Jun 08 31 March 08
£m £m
By type of mandate:
Institutional mandates 86,051 80,433
Open end funds (excluding property funds) 11,357 11,068
Closed end funds (excluding property funds) 5,564 5,702
Property funds 10,715 10,084
113,687 107,287
By asset class:
Fixed income 47,431 47,963
Equities 35,227 35,598
Property 24,634 17,175
Multi Asset 6,395 6,551
113,687 107,287
OVERALL NEW BUSINESS FLOWS FOR 9 MONTHS TO 30 JUNE 2008
Qtr to Qtr to 6 mths to 31 Mar 08 Qtr to 9 mths to 30 Jun 08
31 Dec 31 Mar 30 Jun
07 08 08
Gross inflows:
Fixed income 2,807 1,839 4,646 2,109 6,755
Equities 1,321 3,176 4,497 2,549 7,046
Property 859 503 1,362 836 2,198
Multi Asset 265 67 332 141 473
5,252 5,585 10,837 5,636 16,472
Outflows:
Fixed income 1,844 2,812 4,656 2,223 6,878
Equities 2,885 2,152 5,037 1,854 6,890
Property 175 200 376 297 672
Multi Asset 206 88 295 386 681
5,110 5,252 10,362 4,759 15,121
Net flows:
Fixed income 963 (973) (10) (113) (123)
Equities (1,564) 1,025 (539) 695 156
Property 684 302 986 540 1,526
Multi Asset 59 (21) 37 (245) (207)
142 333 475 877 1,351
NEW BUSINESS FLOWS FOR 9 MONTHS TO 30 JUNE 2008 - FIXED INCOME
Qtr to Qtr to 6 mths to 31 Mar 08 Qtr to 9 mths to 30 Jun 08
31 Dec 31 Mar 30 Jun
07 08 08
Gross inflows:
Asia Pacific 369 112 481 299 780
Emerging markets 301 49 350 55 405
Europe 125 92 217 137 355
Global 355 517 872 829 1,701
High yield 132 59 191 77 268
UK 856 254 1,110 170 1,279
Unfunded strategies - 36 36 - 36
US 669 719 1,388 542 1,931
2,807 1,838 4,646 2,109 6,755
Outflows:
Asia Pacific 553 838 1,390 467 1,857
Emerging markets 123 283 405 55 461
Europe 39 49 88 304 392
Global 424 339 763 167 929
High yield 131 92 222 40 262
UK 307 521 828 505 1,333
Unfunded strategies - - - - -
US 268 691 959 685 1,644
1,844 2,812 4,656 2,223 6,878
Net flows:
Asia Pacific (184) (726) (909) (167) (1,077)
Emerging markets 178 (234) (55) (1) (56)
Europe 86 43 129 (167) (37)
Global (69) 178 109 663 772
High yield 1 (32) (31) 37 6
UK 548 (267) 282 (335) (54)
Unfunded strategies - 36 36 - 36
US 401 28 430 (143) 287
963 (973) (10) (113) (123)
NEW BUSINESS FLOWS FOR 9 MONTHS TO 30 JUNE 2008 - EQUITIES
Qtr to Qtr to 6 mths to 31 Mar 08 Qtr to 9 mths to 30 Jun 08
31 Dec 31 Mar 30 Jun
07 08 08
Gross inflows:
Asia Pacific 677 1,027 1,705 1,052 2,756
Global emerging markets 297 765 1,062 680 1,742
Europe 18 17 35 22 57
Global & EAFE 233 968 1,201 569 1,770
Specialist 25 234 259 41 299
UK 25 51 76 66 142
US 46 114 161 120 281
1,321 3,176 4,497 2,549 7,046
Outflows:
Asia Pacific 2,256 1,211 3,467 1,046 4,513
Global emerging markets 153 210 363 205 568
Europe 45 37 82 50 132
Global & EAFE 65 82 147 79 226
Specialist 43 326 369 193 562
UK 143 88 232 125 357
US 180 198 378 155 533
2,885 2,152 5,037 1,854 6,890
Net flows:
Asia Pacific (1,579) (183) (1,762) 6 (1,756)
Global emerging markets 144 556 699 474 1,174
Europe (27) (20) (47) (28) (75)
Global & EAFE 168 886 1,054 490 1,544
Specialist (18) (92) (110) (153) (263)
UK (118) (38) (156) (60) (215)
US (133) (84) (217) (35) (253)
(1,564) 1,025 (539) 695 156
Note: Figures in the above tables may appear not to add due to rounding differences.
This information is provided by RNS
The company news service from the London Stock Exchange
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