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Finance giant abrdn hits post Aberdeen Asset Management milestone

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Financial services giant abrdn has posted its first full-year revenue increase since it was created by a merger of Aberdeen Asset Management (AAM) and Standard Life.

The company – formerly Standard Life Aberdeen revealed the milestone in its first annual results after it adopted its vowel-light moniker, which is just pronounced “Aberdeen”.

But shares in the group fell 5.3% to 195.75p after the announcement.

Chief executive Stephen Bird said 2021 was a “reset year” for the business, following revenue decline in each year since the £3.8 billion takeover of Granite City-based AAM by Standard Life in 2017.

Strategically, we have made huge strides forward. We have successfully rebranded as abrdn which gives us a unified global identity and purpose.

Stephen Bird, chief executive, abrdn.

Edinburgh-headquartered abrdn said assets under management and administration rose by 1% during 2021, to £542 billion, driven by “positive market movements, the impact of corporate actions and net flows”.

Pre-tax profits for the latest period came in at £1.11bn, up from £838 million in 2020, while fee-based revenue grew by 6% to just over £1.5bn.

Mr Bird said: “In 2021 we set out a clear strategy for how we will create long-term sustainable growth and arrest the decline in revenue.

“I am very pleased to report strong progress for this first year of our three-year plan. We are delivering on our strategy for growth.

“Strategically, we have made huge strides forward. We have simplified and extended the relationship with our largest client, Phoenix.”

Abrdn chief executive Stephen Bird.

He added: “We have successfully rebranded as abrdn which gives us a unified global identity and purpose.

“We have divested non-core assets and built out our capabilities across our three vectors, including in private markets and digital content.

“More broadly, we have sharpened the focus of our investments business to identify the key areas where we have a true competitive advantage.

“And, late in the year, we announced our proposed acquisition of Interactive Investor.”

£1.49bn interactive deal

It is just a few months since Abrdn unveiled plans to acquire subscription-based investment platform Interactive Investor for £1.49 billion.

Last April the group unveiled its new name to a mixed reaction, including some scathing comments on social media.

The new corporate identity is being rolled out across all of the company’s brands after the sale of the group’s insurance arm – and subsequently the Standard Life name – to Phoenix Group.

‘Markets are volatile right now’

On current pressures facing the global financial services industry, Mr Bird said: “Clearly, markets are volatile right now.

“Geopolitical risk and inflation are rising and there remains an element of uncertainty about the pace at which different economies are recovering from the impacts of the Covid-19 pandemic.

“We benefit from a strong capital position enabling us both to continue to invest in the business and return money to shareholders. This balance underpins our ability to create long-term value for shareholders.”

Expert view

John Moore, senior investment manager at wealth manager Brewin Dolphin, said: “It has been a challenging few years for shareholders in abrdn, but there are some indications in today’s results that the company is headed in a more positive direction.

“Assets under management and revenues are beginning to stabilise and abrdn’s costs are improving.

“The situation in Ukraine will obviously affect Abrdn – not least with reports of the company struggling to sell a small stake in Rosneft – but there are tentative signs the management team’s strategy is beginning to yield results which, in turn, should help improve investor sentiment.”

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