Merged SLA sees assets flatline as outflows continue

Assets edge down to £646.2 billion But CEOS ‘delighted’ with staff efforts

Standard Life Aberdeen has seen outflows of funds continue but said it was “delighted” with progress being made with the integration of the business.

In the first update since the £11 billion merger was completed, the combined group recorded net outflows of £23bn in the nine months to 30 September, down slightly on the £23.8bn seen in the same period a year earlier.

Assets under management and administration at 30 September stood at £646.2bn, broadly flat compared to the £647.6bn seen at the beginning of the year.

In a statement, chief executives Martin Gilbert and Keith Skeoch said the group was “making good progress towards creating a world-class investment company”.

“The integration of Aberdeen Standard Investments is on track and we are delighted with the way the teams are coming together to deliver for clients,” they said.

Although net outflows have continued, they stressed they were in line with expectations and that momentum in the business was good with £58.6bn of gross inflows during the period.

“We continue to innovate, launching new funds with strong backing from clients and winning new mandates across a wide range of investment strategies. Standard Life, our pensions and savings business, has had record flows year to date demonstrating further strength and diversity of our business,” they said.

Gilbert and Skeoch said that the successful LPO of its HDFC Life joint venture in India and recent registration as a private securities fund manager in China have further strengthened the business.

They added that the launch of a number of new funds recently including a European logistics income investment trust had highlighted how the group was responding to growing demand for new products from investors.

They added: “We remain confident of delivering longterm value for our clients, our people and our shareholders.”

David Mccann at Numis said although the assets under management figure was around 1 per cent lower than the broker forecast, he said he continued to believe SLA offers “attractive value”.

He also highlighted the 5.5 per cent yield on the shares and the possibility of special dividends linked to the partial disposal of HDFC.

The two companies completed their merger in August having announced proposals in March.

A prospectus issued to investors in May outlined plans to cut some 800 jobs across their combined global workforce of around 9,000.

The firms said at the time they believed the merger would deliver around £200 million in annual cost savings and that “natural turnover” would account for some of the reductions, while other steps will be taken to minimise compulsory redundancies.

The group will also look to rationalise office locations where there is overlap.