Shares in Aberdeen Asset Management (LSE: ADN) were up 3% in early trading as the company reported the successful integration of the Scottish Widow Investment Partnership (SWIP).
The £550m “transformational” acquisition of SWIT in March added £134bn to Aberdeen’s already impressive £190bn assets under management, a 61% increase. The composition of these new assets reduced the Group’s blended average management fee to 36.9 basis points, down from 41.8 basis points. Charges of £25m were incurred on the integration and migration of SWIP, with final charges expected to run to nearly £50m.
The company grew net revenue for the year by 4% but performance fees more than halved from £51m to £21m while recurring fee income was 7% higher. The first three quarters of the year was a difficult period for new business, but the Group experienced improvements in the final quarter, especially October and November. The “Aberdeen” segment of the business experienced net outflows of £16bn for the year, £13bn more than 2013. Management attributed the increase to weaker investor sentiments towards emerging markets within the Group’s core equity products. A single withdrawal by a single client of approximately £4 billion contributed to the loss of assets.
SWIP also contributed net outflows of £4.4bn over the second half of the year. Management expect SWIP outflows from low margin business to continue, but have been encouraged by steady net inflows to the SWIP Property Trust and some new fund launches in the infrastructure sector.
Roger Cornick, Chairman, said that the company remained “committed to our bottom up, fundamental style of investing for the longer term with which we have built our reputation over more than a quarter of a century”.
The Group’s strong cash flows and financial stability allowed the board to recommend a 12.5% increase in the final dividend, making a total dividend of 18.0p per share for the year.
Over the long term, management remain confident in their ability to “deliver attractive returns” for both investment clients and shareholders.
