Standard Life Aberdeen clients pull almost £16bn in six months

Cash inflows of £36.5 billion were undercut by outflows of £52.4 billion as customers defected in the wake of poor performances in global equities, emerging markets and Asia Pacific, with the company’s huge Global Absolute Return Strategy fund a particular focus for client defections.

However, the group took comfort in the fact that the net outflow was down on the previous two six-monthly periods, when a net £16.9 billion and £24 billion were withdrawn respectively. 

SLA also celebrated an improvement in the performance of its fund managers as 65 per cent of its investment strategies beat their benchmark over the past three years, marking an increase compared to the 50 per cent recorded last year.

SLA chief executive Keith Skeoch played down the continuing outflows, saying that they were concentrated on a small number of strategies, while gross inflows were well diversified. The cost control strategy was “on track”, with £234 million delivered of the £350 million per annum targeted, he said.

He added: “We have made good progress in reshaping our business so that it is set up to take advantage of the trends impacting our industry both globally and in the UK. We are encouraged by an improvement in our investment performance and a growing number of strategies with positive ratings from investment consultants. We are seeing inflows that are more diverse and are pleased to have retained £35 billion of Lloyds Banking Group assets.”

Skeoch also said that outflows from absolute return strategies had lessened.

He further added that he hoped that the improvement in fund manager performance would translate into better flows but that it was “very, very difficult to put a date on when”.

The total assets under management increased by 5 per cent to £577 billion thanks to favourable markets. Adjusted profit before tax fell from £311 million to £280 million.

The interim dividend was held at 7.3p. The yield of more than 7 per cent and a major share buyback programme has helped to stabilise the share price this year after a steep fall in 2018.

Steve Clayton, manager of the Hargreaves Lansdown Select UK Income Shares, which holds a stake in Standard Life Aberdeen, said: “These numbers were a little below market forecasts, and showed a continuation of the outflows that the business has been suffering from in recent years. But progress is being made nonetheless.”

The shares fell 4 per cent in early trading, down 12½p to 269½p.