Edinburgh investment giant eyes growth as it cuts jobs
The improvement partly reflected the benefit of the £88m gain abrn recorded on the sale of its European private equity business to Patria Investments in April.
However, interim chief executive Jason Windsor said the group had also been rewarded for efforts to restore profitability by transforming its cost base.
He said: “While market conditions remain challenging, we are firmly on track to realise at least £150m of annualised cost savings by the end of 2025.”
The comment appears to refer to the £150m transformation programme launched by former chief executive Stephen Bird in January, four months before his abrupt departure from the business.
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Abrdn has said that the programme is expected to result in the loss of around 500 jobs, including the removal of layers of management.
The group is a major employer in Scotland. It employs more than 1,800 people in the country, out of a group total of 4,600.
Mr Windsor has been widely tipped to succeed Mr Bird but abrdn gave no update yesterday.
Mr Bird departed in May after less than four years in post, during which he tried to revamp a business which has failed to make the progress expected in the core investment management market.
His efforts included changing the group name to abrdn from Standard Life Aberdeen and acquiring the Interactive Investor business for £1.5bn. Interactive Investor provides a platform on which retail investors can manage their holdings.
Abrdn also provides systems that independent financial advisers can use to administer the portfolios of clients.
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While some sector-watchers have said the group should be broken up Mr Windsor said it has been laying the foundations for growth.
He said: “We have three core businesses, with strong, scale positions in attractive markets and each has headroom to grow.”
However, analysts highlighted the importance of the contribution made by the Interactive Investor business to the relatively strong first half performance by the group.
Abrdn grew underlying profits by £1m to £128m, around 8% ahead of market expectations.
Interactive Investor recorded £3.1bn inflows of funds onto its platform net of withdrawals. Total customer numbers increased by 4% to 422,000. Abrdn noted that existing customers also chose to invest in more of its products.
The adviser business suffered net outflows of £2bn reflecting higher redemptions in the period.
“Elevated outflows included the impact of higher cost of living, further IFA consolidation and the availability of inflation beating cash saving options in the market,” said abrdn.
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The investment business recorded £1bn net outflows of funds under management, compared with £6.5bn outflows last time.
Abrdn said its investment performance on a 1 and 3 year basis had improved since the start of the year.
However, abdrn highlighted the challenges it has faced in the key equities market. The group was created following the £11bn merger of pensions giant Standard Life and Aberdeen Asset Management in 2017.
“The market backdrop continues to present challenges for active management in Equities with only 33% of actively managed funds globally outperforming over the year to 30 June 2024,” said abrdn yesterday.
“Our Equities performance continues to be impacted by this backdrop and our AUM (assets under management) bias towards Asia and Emerging Markets.”
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Abdrn said it continued to focus on making improvements to the investment process in equities with priority areas identified across the value chain.
The outlook for equities has become clouded in recent days. Markets tumbled around the world after weaker than expected jobs numbers on Friday sparked fears the US economy could be set for a slowdown.
Abrdn’s net operating revenues fell by 7% in the first half, to £667m, from £721m, partly reflecting the impact of outflows.
Adjusted operating expenses fell 9%, to £539m, from £594m.
Total assets under management and administration increased by 2% to £505.9bn from £494.9bn helped by market movements.
Shares in abdrn closed down 1.35p at 158.7p.
