ABERDEEN Asset Management (AAM) yesterday revealed it has continued to win new business in its third quarter, but warned that markets were still "a bit volatile".
The fund manager also disclosed that it is to introduce £57 million of cost savings, including a handful of job cuts, to offset falling earnings.
The figure is substantially higher than the £15m in cuts it identified at its half-year results in Ma
y. Of those outlined, £40m will boost earnings.
AAM reported that its assets had grown 6 per cent to £113.7 billion, and it won £5.6bn of new business over the three months to the end of June.
Chief executive Martin Gilbert said yesterday that he believed markets would remain tough, but AAM was confident the company would continue to win new business.
His comments came a few weeks after he told the Fund Forum conference in Barcelona that he believed the credit crunch was "almost over".
He added yesterday: "I still think there will be shocks to the system but I genuinely think the worst is over."
The company told The Scotsman it is likely to axe a number of jobs, mainly through natural wastage. Some cuts look likely to be in its property business.
Finance director Bill Rattray said: "It is not a mass redundancy campaign, there will just be a number of smaller cuts.We can manage our costs to a certain extent, but a lot depends on the markets."
He went on: "The company has stuck by a pretty disciplined investment approach, which has stood it in good stead. However, markets are still a bit volatile, so we remain cautious."
AAM's acquisition of property asset manager Goodman boosted funds under management by £7.3bn, the company said, while net new business in its existing operations was £877 million.
Rattray said that while it would not rule out buying a rival if the right opportunity arose, AAM did not feel it was the right time to hit the acquisition trail.
He said: "We are open to the idea of smaller acquisitions, but we have said before we are not really intent on doing so right now.
Gilbert reiterated that Aberdeen would not be interested in acquiring rival F&C. "We've gone on record to say that F&C is not the kind of deal we'd like to do."
Strong business growth came in the Asia Pacific Equities fund
Analysts welcomed the higher cost savings, which they said should help to overcome lower expected earnings in the volatile market conditions. Aberdeen shares were up 20.75p or 17.08 per cent at 142.25p.
Broker Cazenove yesterday reiterated its "outperform" recommendation on AAM, and said that while the funds flow was reassuring, the key point was the commitment to reduce costs materially over the next two years.
"The market should take heart from this," it said.
The full article contains 487 words and appears in The Scotsman newspaper.
