Abrdn share price tumbles 10 per cent as £4.4bn pulled by clients so far this year
The share price of FTSE 100 firm abrdn slumped after the fund manager reported a major fall in assets under management and administration (AuMA) in the first half of the year.
AuMA dropped to £495.7bn, down from £500bn at the beginning of this year as it reported net outflows of £4.4bn in the first six months.
Its shares were trading over 10.2 per cent lower on Tuesday.
Outflows were concentrated in its investment arm as clients moved away from equities and into debt products and cash. Revenue in the segment was 15 per cent lower than last year reflecting net outflows.
Chief executive Stephen Bird said “if 2022 was one of the hardest investing years in living memory, 2023 is shaping up to be equally challenging. Geopolitical risk is back. Inflation is back. Credit risk is back.”
However, abrdn noted that expenses were down six per cent and said it was on track to deliver £75m in cost reductions by the end of the year.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “Abrdn’s results are a real mixed bag, but there are some tentative signs its move towards diversification is beginning to pay off.”
Bird has been trying to diversify the firm’s sources of income, and abrdn saw a four per cent increase in operating revenue thanks to growth in its adviser and personal segments. It pointed to a “stronger trajectory of growth” for both divisions going forward.
The strong performance from its personal division included the impact of its acquisition of retail investment platform interactive investor last year.
Its adjusted operating profit was up ten per cent year on year, although still behind analyst consensus, while its statutory pretax loss narrowed to £169m from £326m in the first half of last year.
Bird said: “We continued to move at pace to execute our strategy over the first six months of 2023 in a challenging macro environment.”
The fund manager said the outlook for global markets remains “uncertain”. As a result it said it was taking action to put its investments platform on a stronger footing and forecast “additional headwinds” from changing client demand.