Aberdeen Asset Management investors withdraw more than £40bn

Investors have withdrawn more than £40bn from Aberdeen Asset Management as clients grew nervous about shares in China and other emerging markets that the fund manager had built its reputation on.

At the end of September, Aberdeen’s assets under management were £283.7bn compared with £324.4bn a year earlier – a fall of 12.5%. Outflows from equity funds rose to £16.4bn from £13bn.

Emerging markets have fallen from favour this year amid concerns about global growth, particularly in China, whose economy is slowing sharply.

Investors have also pulled money out of emerging markets in expectation of rising US interest rates, causing the final quarter of Aberdeen’s year to be the worst for outflows from these markets since the financial crisis.

Shares of Aberdeen, down by a third since April, fell 4% on Monday morning to 321.5p.

Underlying pre-tax profit in the year to the end of September rose by £1.3m to £491.6m and net revenue increased 5% to £1.17bn, helping fund an 8.3% increase in the dividend to 19.5p a share.

Martin Gilbert, Aberdeen’s chief executive, said: “The cyclical correction in Asian and emerging markets and resulting negative investor sentiment has, as expected, led to further flows from our equities business. While we believe the current weakness may have some way to run, the long-term fundamental attractions of investing in these high-growth economies remain compelling for patient investors.”

Gilbert, who founded Aberdeen in 1983, said the company’s decision to broaden its products and expand into developed markets such as the US had helped underpin a solid set of results. Speculation emerged last month that Gilbert might sell Aberdeen but he said the company was determined to stick to its strategy to create long-term value for clients and shareholders.

“We continue to rebalance and diversify the business, to focus on managing our costs and to generate cash and this has helped to mitigate the impact of the outflows we’ve seen,” Gilbert said.

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