Aberdeen sees investors pulling funds on emerging market jitters

London: Aberdeen Asset Management reported a 12.5 per cent fall in assets after nervous investors pulled money out of its emerging market funds and said it expected further outflows, sending its shares lower on Monday.

Emerging markets have been roiled this year by concerns about global growth, particularly in China, and the likely impact of rising US interest rates, hitting shares in Aberdeen and peers such as Ashmore.

Assets at the end of September totalled £283.7 billion ($426 billion; Dh1.56 trillion), down from £324.4 billion a year earlier, Aberdeen said, hit particularly by outflows of £16.4 billion from its equity funds and a negative market move of £12.1 billion.

“It’s tough times. We just need to wait for emerging markets to come back into fashion,” chief executive Martin Gilbert said on a conference call with journalists.

“In the meantime, we’re sitting there with a very strong balance sheet, generating cash, paying a rising dividend. So, I suppose people are being paid reasonably well to wait for what the upturn... will bring.”

Aberdeen shares led the FTSE 100 index of Britain’s top companies lower, down 3.7 per cent for a year-to-date loss of 25 per cent that leaves them on course to post their biggest yearly fall since 2008.

Advising clients to sell the shares, analyst Paul McGinnis at Shore Capital said outside of a takeover approach, an emerging markets rally was the only thing likely to protect the stock from further near-term falls.

Gilbert said that, while the emerging market weakness “may have some way to run”, the company’s decision to broaden its product offering and expand into developed markets such as the United States had helped underpin a solid set of results.

In 2015, that strategy included the purchase of FLAG Capital Management and Arden Asset Management, which will boost assets in Aberdeen’s alternatives unit, which invests in assets such as hedge funds, to more than £20 billion.

Underlying pretax profit over the period was up slightly to £491.6 million from £490.3 million, helped by the integration of recent acquisitions. The dividend was up 8.3 per cent to 19.5 pence a share.