Aberdeen Asset Management Plc's AUM fell over the final three months of 2016, its fiscal first quarter, on the back of some £10.49 billion in net outflows that the company said were primarily lower-margin.
AUM stood at £302.7 billion as of Dec. 31, 2016, down from £312.1 billion three months earlier. The net outflows were partially offset by £3.3 billion in asset appreciation, although Aberdeen also booked a £2.2 billion AUM reduction as a result of its decision to rationalize its U.S. fixed-income business. It expects a further reduction of approximately £1 billion in early 2017.
The pace of net outflows increased relative to the prior three months, when they totaled £7.19 billion. Fiscal first-quarter outflows included £4.2 billion in two large redemptions of active equity mandates from a British wealth manager and a sovereign wealth fund, as well as anticipated structural outflows from certain institutional clients.
Gross inflows totaled £10.16 billion in the fiscal first quarter, up from £8.35 billion in the prior period, but gross outflows widened to £20.65 billion from £15.54 billion. The fiscal first quarter represented the 15th successive quarter of net outflows, totaling £104.6 billion, Shore Capital analyst Paul McGinnis said in a note cited by Reuters.
"Investor sentiment had been improving steadily in the early part of the quarter, but stalled following the U.S. presidential election results with investors putting asset allocation decisions on hold," said CEO Martin Gilbert.
"While growing interest in a number of our strategies is likely to continue to be masked, in the short term, by significant withdrawals by a number of small clients, I am encouraged by the progress being made."