LONDON: British asset manager abrdn confirmed plans to cut costs on Wednesday after suffering worse than expected outflows of client cash in the second half of 2023.
Abrdn and other active asset managers have been grappling with turbulent markets and growing competition from low-cost passive investors.
The Edinburgh-based company reported net outflows of 12.4 billion pounds ($15.75 billion) for the period, more than double the 5.2 billion withdrawn in the first six months of 2023, in a pre-close trading update ahead of its full-year results next month.
It also confirmed media reports on Tuesday, including from Reuters, that it would shed 500 roles, or about 10% of its total workforce. Abdrn said on Wednesday it aimed to cut 150 million pounds of costs by 2025.
Abdrn shares fell 3.5% by 0836 GMT, having fallen 3.2% the previous day on the reports of its cost-cutting.
Analysts at JPMorgan said in a note the outflows were worse than forecast, but that investors would welcome the cost-cutting.
Abrdn CEO Stephen Bird said the cuts sought to restore the company’s investments business to an “acceptable level of profitability” and would be focused on the company’s group functions and support services.
They will be largely implemented this year and completed in 2025, he added.
The fund manager said its assets under management and administration dipped over the period to 494.9 billion pounds, down from 495.7 billion at the end of June.
Abdrn’s shares have lost half their value since the company was formed from the 2017 merger of Standard Life and Aberdeen Asset Management. It dropped out of Britain‘s blue chip FTSE 100 share index last year.
Bird, who took charge in 2020, has tried to revive the company’s performance by trimming costs and expanding into UK mass-market investing through its acquisition of online platform interactive investor in 2022.
The company has already shed some jobs, reduced its range of funds and sold non-core assets.
Abrdn and other active asset managers have been grappling with turbulent markets and growing competition from low-cost passive investors.
The Edinburgh-based company reported net outflows of 12.4 billion pounds ($15.75 billion) for the period, more than double the 5.2 billion withdrawn in the first six months of 2023, in a pre-close trading update ahead of its full-year results next month.
It also confirmed media reports on Tuesday, including from Reuters, that it would shed 500 roles, or about 10% of its total workforce. Abdrn said on Wednesday it aimed to cut 150 million pounds of costs by 2025.
Abdrn shares fell 3.5% by 0836 GMT, having fallen 3.2% the previous day on the reports of its cost-cutting.
Analysts at JPMorgan said in a note the outflows were worse than forecast, but that investors would welcome the cost-cutting.
Abrdn CEO Stephen Bird said the cuts sought to restore the company’s investments business to an “acceptable level of profitability” and would be focused on the company’s group functions and support services.
They will be largely implemented this year and completed in 2025, he added.
The fund manager said its assets under management and administration dipped over the period to 494.9 billion pounds, down from 495.7 billion at the end of June.
Abdrn’s shares have lost half their value since the company was formed from the 2017 merger of Standard Life and Aberdeen Asset Management. It dropped out of Britain‘s blue chip FTSE 100 share index last year.
Bird, who took charge in 2020, has tried to revive the company’s performance by trimming costs and expanding into UK mass-market investing through its acquisition of online platform interactive investor in 2022.
The company has already shed some jobs, reduced its range of funds and sold non-core assets.
