Abrdn faces FTSE 100 ejection

Abrdn faces FTSE 100 ejection

Fund house Abrdn may find itself ejected from the FTSE 100 next week after its share price crashed 39 per cent in the year-to-date to August 24.

FTSE Russell, which manages the FTSE 100 and FTSE 250 indexes, will announce changes to the indices on August 30, and it indicated this week (August 23) that Abrdn is set to lose out.

Global markets strategist at eToro, Ben Laidler, said changes to big indices like the FTSE 100 have become more important as the money tracking them has surged. 

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“The amount invested in global exchange traded funds (ETFs) has almost doubled to a dramatic $9.1tn (£7.69tn) just since 2018.”

Continued struggles

Abrdn, which was previously known as Standard Life Abderdeen, has seen its share price decline since the merger of Standard Life and Aberdeen Asset Management in 2017, plunging 69 per cent in the five years to August 24.

Stephen Bird, chief executive officer of the fund house, said 2021 was the group’s “reset year”, after being appointed to the role in late 2020.

The "reset year" came with the first rise in fee-based revenue since the merger, though the group swung to a loss in the first half of this year.

Volatile global markets have increased the pressure on fund managers, a number of whom have reduced pay packages and delayed hiring decisions in an attempt to cut costs.

Acquisition plans

Bird has previously hinted he wants to grow the firm through acquisitions, and at June 30 the firm had £2.8bn in regulatory capital, according to its results. 

In August last year the company bought AI-driven business Exo Investing to launch a 24/7 digital wealth management solution.

Then in November it bought investment platform Finimize, and in December paid £1.5bn for Interactive Investor.

Accompanying Abrdn out of the FTSE 100 is likely to be Hikma Pharmaceuticals, whose share price has dropped 37 per cent in the year-to-date to August 24.

Replacing them, according to FTSE Russell, will probably be the F&C Investment Trust, which runs £5.2bn, and ConvaTec Group.

Abrdn declined to comment.