Aberdeen assets drop after client withdraws £4.2bn

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Emerging markets-focused fund manager Aberdeen Asset Management said assets dipped in the June quarter after clients withdrew £8.8bn, offsetting improved market performance and an uptick in broader investor sentiment.

Aberdeen said in a third-quarter trading statement yesterday that assets under management (AuM) fell 0.6 per cent from the previous three months to £322.5bn, hitting its shares.

Emerging market stocks have risen strongly this year, up around 17 per cent, despite investors’ fears about the pace of economic growth in China and the prospect of tougher sanctions against Russia over the conflict in Ukraine.

Aberdeen said about half the money pulled, £4.2bn, was the result of one institutional client withdrawing funds from its low-margin equity products.

The fund manger cited poor performance as the reason, RBC Capital Markets analyst Peter Lenardos said in a note to clients.

The company also saw £3.3bn leave funds acquired through its purchase of SWIP, the fund arm of Lloyds Banking Group, although much of the low-margin outflow had been expected, Aberdeen said.

Excluding the large client withdrawal, underlying net outflows from global emerging market equities were £200m, boosted by net inflows of £100m into Asia-Pacific equity funds.

Before the results, two analysts had a strong buy” recommendation on Aberdeen, 11 called it a “buy”, four were “hold”, with just one calling it a “sell” and one a “strong sell”, Thomson Reuters data showed.

Rival fund managers Schroders and Jupiter Fund Management, both of which report later this week but which do not have such an emerging markets focus as Aberdeen, were down around 0.3 per cent.