Aberdeen Asset Management said it would batten down the hatches in an attempt to “weather” continued volatility in the markets while reporting a 3% hike in funds under its management.
The group used a trading update for the three months to the end of August to reveal a better earnings performance, but also noted falls in the new business flows in both its core operation and newly-acquired Scottish Widow Investment Partnership (Swip) division.
Chief executive Martin Gilbert said the group had made “significant progress” since the £550 million deal which transformed his company into Europe’s largest listed investment firm late last year, hailing the addition of new services to its portfolio.
“Our enhanced fixed income, property and solutions capabilities, combined with our historic strength in equities, mean we are well placed to meet the future needs of investors around the world,” he said.
“With the Swip integration on track we remain confident the increased scale and breadth of the group’s business provides a solid foundation to weather what are likely to remain volatile markets.”
He said integration was going well and also highlighted the moderation of business outflows over the summer months.
Aberdeen’s £1.7 billion reduction was considerably below the £8.8bn recorded during the three months to June.
“Our equity capabilities are recovering, both in terms of performance and flows following a tough 2013,” Mr Gilbert said.
“It’s also encouraging that our marketing focus on non-equity products is gaining traction, particularly in terms of property and emerging market debt.”
AAM completed the Swip deal with the separate purchase of its infrastructure fund in May, and expects to complete the bulk of front-office integration of the two businesses by the end of this year.
Market movement and performance brought AAM £7.9bn, while beneficial foreign exchange movements added a further £2.5bn to take total assets under management to £331.2bn, up 3% on the previous quarter.
AAM said it had won new business in its higher margin operations while outflows were “more weighted towards lower margin capabilities”, and hailed an improvement in sentiment towards emerging markets and Asia.
It said it expected to lose more business as clients realigned their portfolios following the Swip buy-out.
“Net outflows from the legacy Swip business totalled £0.7 billion, considerably lower than the outcome for the previous quarter,” the statement added.
Shares closed on Monday largely unchanged at 399p.