Aberdeen Asset Management recorded net outflows of £10.5bn in the three months to December 31 2016 driven by two large expected redemptions and structural outflows from some institutional clients.
A trading statement for the fourth quarter of 2016 showed assets under management fell from £312.1bn at the end of September to £302.7bn by the end of the year.
According to Aberdeen the bulk of the net outflows were “lower margin” and included two large redemptions, equating to £4.2bn of active equity mandates, from a UK wealth manager and a sovereign wealth fund that was reported in the firm’s 2016 results, as well as “anticipated structural outflows from certain institutional clients”.
The statement also highlighted a further £2.4bn is scheduled to be withdrawn from lower margin portfolios during the current quarter “in addition to the normal level of structural outflows”.
Aside from the net outflows the trading statement recorded a £2.2bn reduction in assets as a consequence of the decision to rationalise its US fixed income business. As part of this rationalisation process, which sees Aberdeen withdraw from managing US Core and Core-Plus mandates, the firm expects a “further reduction of approximately £1bn in the early part of 2017”.
Positive market and foreign exchange performance of £3.3bn in the period provided some relief, however the latest figures continued the trend of outflows experienced by the firm in 2016, which had reached £23.7bn to the end of September 2016.
Martin Gilbert, chief executive of Aberdeen, said that while investor sentiment had been improving steadily in the early part of the quarter, it “stalled following the US presidential election result with investors putting asset allocation decisions on hold”.
But he continued: “Encouragingly, despite the market volatility our equity strategies produced strong returns for the year. While growing interest in a number of our strategies is likely to continue to be masked, in the short-term, by significant withdrawals by a small number of clients, I am encouraged by the progress being made.
“Overall Aberdeen remains in good shape, we have a strong balance sheet, a global client base and wide range of capabilities to meet the needs of investors."