The new CEO of abrdn recently faced a tough challenge as the company reported a sharp drop in share prices. The investment firm saw its shares plunge by over 10.5% after revealing further net outflows from its Investments arm in the first nine months of the year. While the outflows were less than the previous year, ongoing challenges at the Adviser business were highlighted.
Clients withdrew £4.5bn from investment funds, bringing assets under management and administration at the division to £368.2 billion. The Adviser division reported net outflows of £3bn, leading to assets under management and administration of £75.1bn. abrdn mentioned that actions were being taken to reverse this trend, including investing in technology, repricing strategies, proposition upgrades, and strengthening the leadership team.
Despite these challenges, total assets under management and administration across abrdn increased by 2% to £506.7bn. The growth of the interactive investor (ii) platform played a significant role in this increase, with customer numbers rising by 6% to 430,000 and assets under management rising by 13% to £74.5bn.
Since the merger of Aberdeen Asset Management and Standard Life in 2017, abrdn has struggled to stem outflows from its investment funds. The company underwent a restructuring program to reduce costs and improve the performance of its investment business. This program is expected to result in around 500 job cuts in Edinburgh, equating to a 10% reduction in the workforce.
The new CEO, Jason Windsor, expressed confidence in the company’s ability to address the challenges and achieve sustainable growth. He emphasized the importance of transforming performance, improving the client experience, and strengthening talent and culture within the organization.
Stockbroker Panmure Liberum acknowledged the challenges faced by the new CEO but expressed hope that the management team could overcome these obstacles. They believed that there was more value in the business than the current share price reflected and that the management team had the potential to unlock this value.
Despite the drop in share prices, abrdn remains focused on its priorities and strategic initiatives to drive growth and profitability. The company’s transformation program is on track, and there is optimism about the future under the leadership of the new CEO.
