Aberdeen is not for sale, says fund boss

Gil­bert stands firm but client ex­o­dus sees £34bn with­drawn

Daily Mail - - City & Finance - By James Salmon

THE em­bat­tled boss of Aberdeen As­set Man­age­ment has in­sisted the emerg­ing mar­ket spe­cial­ist is not up for sale as it con­tin­ued to haem­or­rhage money from ner­vous in­vestors.

It re­vealed al­most £34bn had been pulled out of its funds over the year, with £ 12.7bn of this com­ing in the three months to the end of Septem­ber.

The lat­est ex­o­dus – even worse than City an­a­lysts pre­dicted – was trig­gered by the slow­down in emerg­ing mar­kets, in­clud­ing China. Proof that Aberdeen has not man­aged to stem the huge out­flows un­nerved in­vestors, knock­ing nearly 5pc off its share price.

The in­vest­ment gi­ant – which runs £283.7bn – has seen al­most a third wiped off its value over the past 12 months. This has fu­elled spec­u­la­tion that the com­pany is look­ing for a buyer.

But chief ex­ec­u­tive Martin Gil­bert, 60, said he was ‘up­set’ by the ru­mours and in­sisted he plans to re­main at the helm for the next decade, em­u­lat­ing his hero Sir Alex Ferguson, who man­aged Manch­ester United un­til he was 71.

As man­ager of Aberdeen foot­ball club, Ferguson won the Euro­pean Cup Win­ners’ Cup in 1983, the same year Gil­bert founded the fund man­ager which bears the city’s name.

of the takeover ru­mours, Gil­bert said: ‘It’s com­pletely un­true. It’s a great ad­van­tage to be in­de­pen­dent. We’ve never ap­proached any­one and won’t be do­ing so. We’ve not re­ceived any ap­proaches ei­ther.’ But he could of­fer lit­tle re­as­sur­ance to in­vestors bruised by losses in its emerg­ing mar­kets funds, say­ing it ‘could be some time’ be­fore they bounce back.

Ac­cord­ing to Har­g­reaves Lans­down, savers who in­vested £10,000 in its flag­ship Asia Pacific Eq­uity fund at the end of Septem­ber last year were sit­ting on a pa­per loss of al­most £1,500 by Septem­ber 30 this year. De­spite the huge out­flows, prof­its at Aberdeen dropped only slightly to £ 353.7m, from £354.6m in 2014.

Gil­bert said: ‘ These are great re­sults in a dif­fi­cult year. The real chal­lenge is the year ahead. We have to wait un­til emerg­ing mar­kets and Asian mar­kets come back into fash­ion again.’

Aberdeen has al­ready gone to great lengths to re­duce its reliance on emerg­ing mar­kets, which have been a source of great strength for so long. It bought Scot­tish Wid­ows In­vest­ment Part­ner­ship from Lloyds Bank­ing Group for £650m just two years ago.

The deal saw it briefly over­take Schroders as Europe’s largest listed fund man­ager. But it slipped back into sec­ond place as the malaise in emerg­ing mar­kets took its toll.

The aim was to broaden the busi­ness, with SWIP more heav­ily fo­cused on the UK – and par­tic­u­larly in cor­po­rate bonds funds, prop­erty and ‘tracker funds’ which blindly fol­low stock mar­ket move­ments. But the prospect of a hike in in­ter­est rates in the US and the UK has also caused cor­po­rate bond funds to fall out of favour. This is be­cause the in­ter­est rates paid by cor­po­rate bonds be­come less at­trac­tive if re­turns in risk-free sav­ings ac­counts im­prove.

Gil­bert re­it­er­ated con­cerns about panic sell­ing in the cor­po­rate bond mar­ket and sug­gested that cen­tral banks may have to in­ter­vene as ‘buy­ers of last re­sort’.

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