ABERDEEN Asset Management is to strip a further £20 million in costs from the business after revealing that assets under management had tumbled below the £100 billion mark.
The FTSE 250 group, part way through a deal with Credit Suisse that should make it Britain's largest listed fund manager, said yesterday that assets under management stood at £96.3bn at the end of March, down £11bn on a year earlier.
AAM revealed
the fall in assets as it reported a 30 per cent slide in underlying pre-tax profits for the six months to 31 March to £33m.
Martin Gilbert, AAM's chief executive and founder, claimed the firm was better positioned than its rivals to cope with the downturn because of its broad range of activities.
"Aberdeen is well placed to succeed in current market conditions, which we expect will remain challenging for some time to come," he said.
Despite already stripping out £77m from its cost base in the last 12 months, AAM announced plans to make a further £20m in "efficiencies".
Finance director Bill Rattray said that as well as the reduction in some mid-level roles the fund manager would seek to drive savings in outsourced operations.
"We regard a lot of the cost reduction programme as an ongoing process," Rattray said, declining to give specific job numbers.
Despite the falls in assets and profits the company repeated its willingness to pursue acquisition opportunities, with valuations falling in the market downturn.
As well as two significant property deals in the past 18 months, AAM took control of the first £7.1bn in assets from a deal with Credit Suisse last week.
That agreement should add some £38bn to total assets under management, allowing AAM to overtake Schroders as Britain's largest listed fund manager.
"I think we've always taken the view that there are certain stages in the cycle where it is more attractive to be growing assets organically," Rattray said.
"We're now at a point in the cycle where acquisitions are attractive."
He added that while there were no deals imminent "everything we hear or read in the press" suggested a large number of fund management assets could soon be up for sale.
Before the Credit Suisse deal AAM was linked with a bid for New Star Asset Management, while in recent weeks Gilbert is said to have dropped hints that the Scots firm could be interested in investigating a deal for Insight, now part of Lloyds Banking Group.
About £6bn of the recent fall in assets under management related to a cost-cutting programme, including the sale of AAM's Belgian property business, the conclusion of fixed-term mandates and the firm deciding not to compete for other low-margin mandates that expired.
AAM blamed clients reducing leverage for a sharp fall in assets managed by its fixed-income team, which saw a net asset outflow of £8.4bn in the past 12 months.
The remaining £31bn in assets from the Credit Suisse deal are set to be transferred to AAM at the end of June.
