The Courier & Advertiser (Angus and Dundee)
AAM chief warning political uncertainties could knock renewed investor confidence
Aberdeen Asset Management reported an “encouraging” set of results, but warned that forthcoming elections across Europe and the UK could knock investor sentiment.
The group said “buoyant” markets and the weaker pound helped “cushion the effects” of net outflows, which slowed from £10.5 billion in the last three months of 2016, to £2.9bn in the three months to March 31.
It also reported a 19.8% rise in pre-tax profits to £195.2 million for the six months to March 31, while revenues jumped 10.6% to £534.9m thanks to “favourable market conditions” and the completion of an efficiency drive set to save £70m per year.
Chief executive Martin Gilbert said: “These figures reflect improving sentiment towards emerging markets combined with our transition to becoming a full-service asset manager offering a broad range of capabilities via multiple distribution channels globally.”
However, he cautioned that political changes could upend market optimism and hinder progress.
“Global growth appears to be recovering, but elections and geopolitical issues will continue to weigh on investor sentiment,” Mr Gilbert said.
His comments come a week ahead of the final round of voting for the French presidential election and ahead of the UK’s snap general election on June 8, which could affect the direction of Brexit negotiations.
Attention will then turn to Germany’s federal poll, which is set to take place in September.
Aberdeen is still recommending its £11bn merger with Standard Life. This would create Britain’s biggest asset manager, overseeing around £660bn worth of global assets.
Under the terms of the deal, Aberdeen shareholders would own 33.3% of the combined group and Standard Life shareholders 66.7%.
Standard Life chairman Sir Gerry Grimstone is in line to head up the combined entity.
The proposed structure will also see Mr Gilbert and Standard Life chief executive Keith Skeoch installed as co-chief executives of the new firm.
Mr Gilbert said: “Our proposed merger with Standard Life is on track and the combined businesses will form a world-class investment company, strengthening further both companies’ ability to meet the evolving needs of clients and customers.”
Aberdeen said further information on the proposed merger “will be sent to shareholders shortly”, adding that the deal is expected to close by the end of September.
The deal is still awaiting approval from shareholders and regulators.
Shares in AAM closed the day up 4.27% or 11.90p at 290.90p.