UPDATE 1-Fund firm Aberdeen says clients pull out 2.8 bln stg

Thu Jan 19, 2012 2:32am EST

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* Assets under management 173.9 bln stg, up from 169.9 bln stg at end-Sept

* Net outflows 2.8 bln stg in three months to Dec

* Net flows add arond 10 mln stg annualised fee income

By Laurence Fletcher

LONDON, Jan 19 (Reuters) - Aberdeen Asset Management saw client outflows accelerate at the end of last year as investors fretted over the euro zone's deepening debt crisis, but said its higher-margin funds were still attracting new business.

Aberdeen said investors pulled out a net 2.8 billion pounds ($4.31 billion) of their cash in the three months to end-December, largely from lower margin assets such as fixed income, with the loss of one global mandate in particular hitting flows.

In the previous quarter the firm saw a net 1.7 billion pounds of withdrawals.

However, clients continue to buy its Asian and emerging market debt funds, which command higher margins and the firm said net flows added around 10 million pounds of fee income.

Despite the net outflows, Aberdeen said total assets nevertheless edged up 2 percent over the three months to 173.9 billion pounds, helped by a combination of market gains, performance and currency moves.

Last month the firm reported better-than-expected full-year profit but also reported a spike in outflows.

"New business flows remain focused on our higher margin pooled funds with outflows largely limited to lower margin strategies," said Aberdeen Chief Executive Martin Gilbert.

"Our investment performance is robust in the face of ongoing macroeconomic instability."

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