Abrdn suffered from ‘past mistakes’ - now new CEO says firm is up to the challenge
“There is no doubting the challenge faced by the new CEO, but there should be a hope that he stands a better chance of rising to that challenge than his predecessor” – Panmure Liberum analysts
Abrdn’s new chief executive has insisted that plans are in place to “address our challenges” as clients pulled more than £3 billion of funds in the third quarter.
Jason Windsor, who was formally appointed to the top post at the Scottish funds giant last month, said the firm had “strong, scale positions in attractive markets”, while each of its businesses had headroom to grow.
“We have plans in place to address our challenges and our transformation programme is on track,” he added. “While there remains much to do, I am confident that we have great talent and we can make further progress towards profitable and sustainable long-term growth, benefiting our shareholders, clients, and colleagues.”
He made the remarks as the group reported £3.1bn of net outflows of client funds in the third quarter. That total was less than half the £6.7bn that exited the firm in the same period a year earlier.
On a positive note, assets under management and administration edged up by some £800 million over the period to £506.7bn as of September. There was strong growth at the group’s Interactive Investor platform, which targets armchair investors. Assets on the DIY investment platform rose from £66bn at the end of 2023 to £74.5bn at the end of September.
Many mid-sized fund managers have been under pressure in recent years amid growing competition from cheaper index-tracking products and inflationary pressure on costs, with Abrdn hit particularly hard.
Windsor, who was previously the firm’s chief financial officer before becoming interim CEO, added: “Today's update shows strong performance in parts of our group; however, it also underlines the importance of delivering on the priorities I set out at the half year.
“I’m pleased with the continued growth in Interactive Investor; meanwhile, there are challenges to overcome in Adviser, where we aim to return to being the platform of choice for clients. In Investments, we need to do more to capitalise on our strengths and improve performance and flows, particularly in equities.”
In a research note, analysts at Panmure Liberum said: “There is no doubting the challenge faced by the new CEO, but there should be a hope that he stands a better chance of rising to that challenge than his predecessor. In the short term the business continues to suffer from past mistakes, not least in Adviser where Abrdn’s pain has already provided others’ gains.
“Estimates slip but the opportunity in the share price remains: there is more value in the business than the current share price discounts, but maybe now there is a management team which can do something about that.”
Windsor replaced Stephen Bird, who announced that he was stepping down earlier this year after a four-year tenure that included a controversial rebranding of the Edinburgh-headquartered investment group, from Standard Life Aberdeen. During his time as chief executive, Bird undertook a sweeping overhaul of the funds business, including axing some 500 jobs. The firm also made some key acquisitions including the purchase of Interactive Investor.
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