Aberdeen to meet profit forecast despite outflows

LONDON Mon Sep 23, 2013 4:44am EDT

LONDON (Reuters) - Aberdeen Asset Management (ADN.L) expects profits to come in towards the top end of the range of analyst forecasts in the current year, thanks to inflows into higher-margin products.

Aberdeen said clients pulled a net 1.2 billion pounds ($1.9 billion) from its funds in July and August, reflecting volatile conditions especially in emerging economies where it is heavily invested, but this was partly offset by strong inflows into its higher-margin equities products as well as its emerging market debt and high yield bond funds.

The company said on Monday that thanks to the shift towards funds where it earns more in fee income it expects underlying pretax profit for the current financial year to be towards the top end of the range of forecasts of 431 million pounds to 477 million.

Shares in Aberdeen were 1.7 percent higher at 0721 GMT, against a 0.4 percent fall in the blue chip FTSE 100 index .FTSE.

Aberdeen's net outflows, which were in line with analyst forecasts, combined with negative investment performance to drag its assets under management down to 201.7 billion pounds at the end of August from 209.6 billion at the end of June.

It said clients withdrew money from fixed income, equity - including its global emerging market product - money market and its alternative fund ranges.

The withdrawals follow 3.4 billion pounds of outflows in the three months to end-June after the big sell-off in emerging markets in May, but Aberdeen said the rate of recent client exits had fallen.

"Aberdeen's performance during the past year, and particularly over the last three months, has demonstrated our core resilience," said Martin Gilbert, chief executive.

Total net outflows for the 11 months to end-August stand at 200 million pounds.

Analysts at brokerage Numis forecast total outflows of 1.6 billion pounds for the three months to end-September.

"As we had expected, net flows were not a disaster, despite a difficult environment in the period for (emerging market and) ... Asia focused managers," the Numis analysts said in a note.

The performance of many fund managers has been hit by investor nervousness in July and August ahead of an announcement by the U.S. Federal Reserve about the direction of monetary policy in the world's largest economy.

However some managers such as Ashmore Group (ASHM.L) have said existing clients are largely staying put, confident about longer-term prospects for economic growth.

($1 = 0.6250 British pounds)

(Editing by Clare Hutchison and David Holmes)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.