Low oil prices and other factors creating uncertainty in the global economy have failed to impede Aberdeen Asset Management (AAM), the group’s latest accounts show.
Martin Gilbert, the Granite City-based investment giant’s chief executive, said market conditions remained volatile but a “philosophy of long-term fundamental investing” was paying dividends for the group’s clients around the world.
Statutory pre-tax profits fell by more than £35million to £354.6million in the year to September 30, hit by £60million of costs from AAM’s recent acquisition of the Scottish Widows Partnership Group (Swip) and related private equity and infrastructure fund management businesses.
But underlying profits grew by 2% to £490.3million, from £482.7million previously, as net revenue jumped by 4% to £1.12billion.
Assets under management rocketed by 62% to £324.4billion.
Finance director Bill Rattray told the Press and Journal the “slightly strange” year got off to a bad start, amid weak investor sentiment in emerging markets, but got better in the second half to produce an overall “solid” performance.
He said he would prefer the £20billlion that was reported for net outflows – new business less cash withdrawals – to be “a much lower number” but a final quarter improvement in the amount of cash coming in was an encouraging sign.
Most of the outflows were from equity funds and those investing in Asia-Pacific and global emerging markets.
AAM’s strength lay in seeking out the best stocks for investment returns despite the “noise and weakness” that was almost a constant feature of the global economy, Mr Rattray said.
Mr Gilbert added: “We have delivered robust performance this year in a more challenging environment, underpinned by our long-term track record and also our transformational acquisition of Swip, which has diversified the group.
“The first half of the year was particularly demanding, as investor sentiment turned sharply against emerging market economies.
“Recently, however, we have seen those concerns abate and outflows from our Asian and emerging market funds have moderated.
“The integration of Swip is proceeding on schedule and is already beginning to deliver cost synergies ahead of expectations.”
AAM completed its £550million acquisition of Swip and related assets from Lloyds Banking Group earlier this year.
Yesterday, Mr Gilbert said the expansion had made AAM more balanced and “more easily able to ride out the ebb and flow of investor sentiment in particular asset classes and geographies”.
He added: “Markets are likely to remain volatile given the uncertain economic and interest rate environment but our new financial year has started well, with our broadened product range attracting interest from a range of clients.
“We will continue to apply our philosophy of long-term fundamental investing to meet the objectives of our clients.”
The firm said it would pay a final dividend of 11.25p per share, bringing its total dividend to 18p.