The role of active management is to be “tested and proven” through the coronavirus crisis, according to industry veteran Martin Gilbert.
Speaking to shareholders via video in place of an AGM address today (May 12), Mr Gilbert said he was a “strong believer” in active fund management of the type championed at Standard Life Aberdeen.
Today marks Mr Gilbert’s last day in his role as chairman of Aberdeen Standard Investments after 37 years at the company, having co-founded Aberdeen Asset Management and led the firm into a merger with Standard Life to create Aberdeen Standard Investments in 2017.
Since the merger, Aberdeen Standard Investments has been the asset management arm of Standard Life Aberdeen.
He said: “I foresee that [active management]’s strength will be tested and proven as we emerge from this global pandemic and economic crisis.
“The economy needs leading investors like Standard Life Aberdeen to play their role in the recovery and we will support businesses as they emerge from this dark time.”
Proponents of active management claim the majority of actively managed funds will outperform passive portfolios over time.
Meanwhile, others argue active funds are unable to consistently beat the markets and that the extra fees paid for active management whittle away at investors’ returns.
Figures from Morningstar published last month showed investors fled active equity funds to the tune of £3.9bn in March and instead piled £3.2bn into passive equity mandates, suggesting investors were reaching for the cheaper option when markets tumbled.
But some believe that longer-term the effects of the coronavirus crisis on markets will trigger a shift into active funds as the prolonged period of strong performance of equity markets — which made it logical to hold passive funds — comes to an end.
Mr Gilbert also used his address to thank colleagues, including chief executive Keith Skeoch and chairman of Standard Life Aberdeen Sir Douglas Flint along with other board members and senior staff, for their support throughout his time at Standard Life Aberdeen.
He said: “This is a significant day for me as I'm stepping down from the board after serving as the director of Aberdeen Asset Management and Standard Life Aberdeen for the last 37 years. During that time we’ve grown the business from a room in Aberdeen to a global business.
“We could not have done any of this without enormous help from many many people along the way. I want to thank all my colleagues past and present along the way, who not only made the journey possible but enjoyable.”
Mr Gilbert added that while he was “moving onto other things”, his heart would “always be with this business”.
A statement from Keith Skeoch, chief executive, showed Standard Life Aberdeen’s assets under management stood at £490bn as at April 30, 2020, compared with £577bn in August last year, and net outflows were estimated at £24bn for the first four months of the year.
However, some £25bn of outflows related to withdrawals from Lloyds Banking Group — which announced it was withdrawing a segregated mandate in July last year — meaning Standard Life Aberdeen saw net inflows of £1bn outside of this transaction.
The company also confirmed it would pay the final dividend for 2019 in an environment where a number of firms have suspended or culled such payouts, adding the decision was “supported by [its] capital strength”.
imogen.tew@ft.com
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