Aberdeen Asset Management (AAM) chief executive Martin Gilbert remains upbeat about the finance giant’s prospects despite investors reacting negatively to first half results.
Mr Gilbert told the Press and Journal yesterday the global asset manager’s diverse portfolio was already benefiting from an improvement in key emerging markets.
He said this was likely to continue in the second half, when AAM would also start reaping rewards from its recent acquisition of the Scottish Widows Partnership Group (Swip) and related private equity and infrastructure fund management businesses from Lloyds Banking Group in a deal worth about £550million.
“We have recently seen a turnaround (in emerging markets) after a pretty tough few months,” said Mr Gilbert, adding: “Sentiment is improving.”
Worries about China’s slowing economy and political unrest in Ukraine were among factors behind investors withdrawing a net £3.9billion from AAM’s regional investment funds in January and February.
Some target countries, such as China and Russia, are still challenging because of local economic conditions but AAM’s long-term commitment to these and other developing markets is unchanged.
“That is where we see the growth coming from,” Mr Gilbert said after the Aberdeen firm announced a 3% drop in underlying pre-tax profits, to £217million, for the six months to March 31. Revenue was also down, by 2% to £503.5million, with this figure and profits both falling short of analysts’ forecasts.
The group’s shares fell sharply in early trading but recovered some of the lost ground to end the day 2.3% lower at 435.4p.
Mr Gilbert said he was unperturbed about the City’s response to AAM’s figures, with the shares having performed well last week.
AAM increased its interim dividend by 12.5%, to 6.75p, in line with the board’s objective to pay a growing sum each year.
The half-year dividend has increased by an average of 16.9% per annum over the past 10 years. Over the past five years, the annual growth rate is 19%.
Mr Gilbert said the first half figures were impacted by costs of more than £15million related to the Swip deal, most of which completed at the end of March. The Swip takeover boosted assets under management at March 31 by £134.1billion, to £324.5billion, as AAM catapulted into the world’s top 10 fund managers.
Mr Gilbert said: “Aberdeen has delivered a resilient set of numbers in this half year, given the difficult backdrop for emerging markets.
“Our disciplined investment approach, long-term investment track record and tradition of client service have enabled us to limit equity outflows, while we have continued to win mandates in other asset classes, such as fixed income and property.”
Chairman Roger Cornick added: “We continue to see strong growth in North America, continental Europe and selective markets in Asia.”