Improving sentiment towards Asia and emerging markets wasn’t enough to offset a fall in the overall portfolio at Aberdeen Asset Management, figures for the nine months to June have revealed.
An interim trading statement to the markets disclosed a 0.6% fall in total assets under management during the last quarter, as new business flows fell by £5.5 billion.
But AAM said that the withdrawal of a single client “masked” an improving performance, with a recovery in some areas.
It said the integration of the Scottish Widows Investment Partnership business, acquired in a £550 million deal late last year, was both on schedule and set to realise the expected cost synergies.
AAM completed the transaction with the separate purchase of SWIP’s infrastructure fund in May, and expects to complete the bulk of front-office integration of the two businesses by the end of this year.
Chief executive Martin Gilbert said the combination left the newly-enlarged group better placed to deliver returns to its customers, with hopes for organic growth helped by a better appetite towards the Far East.
“Encouragingly, investor sentiment towards Asia and emerging markets recovered somewhat during the quarter,” he said.
“While the improvement in our underlying equity new business flows has been masked by a significant withdrawal by a single client, it is rewarding to see growing interest in our broader product range.
“We completed the acquisition of SWIP at the beginning of the quarter and we are pleased with the progress of the integration so far, in terms of both timing and the planned synergies.
“Our enlarged and strengthened business enables us to meet the needs of a broader range of clients given our diverse product mix and Aberdeen, as a result, is even better placed to deliver attractive returns to clients and shareholders alike,” he added.
Total assets under management reached £322.5bn at the end of the quarter, with equity performance ahead of the group’s benchmark during 2014. Net new business also fell by £3.3bn at SWIP, while exchange costs of £5.3bn also hampered an £11.3bn uplift in performance.
AAM said underlying trends had a “more encouraging tone”, with £700m flowing into its emerging market debt funds, Asia Pacific contributing £100m of net inflow, and net outgoings from global emerging market equities reduced to only £200m.
It said the trend had continued this month, while new mandates have also been won and are expected to be funded during the final quarter of the year.
The group stressed that outflows were from lower-margin product and would have a “relatively small” impact on fee income.
“While we remain cautious on market sentiment in the short term, we remain confident that we can continue to build the group’s revenue and profit through further organic growth,” AAM said.
Stocks closed the day down 5.3% or 24.4p to 435p.