Aberdeen Surges on New Business Inflows, More Cost Cutting

Apr 01, 2014 12:40 pm ET

(Adds closing share prices and payment to Lloyds in final paragraph.)

April 1 (Bloomberg) -- Aberdeen Asset Management Plc, Europe’s largest publicly traded money manager, surged in London trading after announcing 1.2 billion pounds ($2 billion) in new funds for March and more plans to cut costs.

The company said it won a “strong pipeline” of incoming funds across its investment units last month, according to a statement today. It also estimated that net outflows in March slowed to 200 million pounds from 3.9 billion pounds in the first two months of 2014.

Chief Executive Officer Martin Gilbert said the company identified cost savings “over and above” those expected from its purchase of Scottish Widows Investment Partnership, which was completed today. Aberdeen shares jumped 6.7 percent in London trading, the most since the Scottish Widows deal was announced in November.

“Encouraging inflows to emerging-market debt, high-yield bonds and property have partly offset net outflows from our Asian and emerging-market equity products,” Gilbert said in the statement.

Shares of Aberdeen, which invests about two-thirds of its assets in emerging markets, are still down 17 percent. The U.S. Federal Reserve’s reduced stimulus has tempered demand for riskier assets and prompted clients to withdraw funds. Ashmore Group Plc, a smaller fund manager that focuses on emerging markets, reported $2.9 billion of net outflows in February.

Top-Up Payment

Aberdeen agreed to acquire Scottish Widows from Lloyds Banking Group Plc in November, overtaking Schroders Plc as the biggest publicly traded money manager in Europe. The company said the purchase brought assets under management to 324.5 billion pounds as of Feb. 28, assuming the deal had been completed on that date.

Aberdeen also said it would make a deferred “top-up” payment of 39.4 million pounds worth of cash or stock to Lloyds in a year’s time, as its average share price in the five days through yesterday was below the deal’s 420 pence-per-share “reference price.” That makes the total price of the transaction 550 million pounds, the company said.