AS I SEE IT: TERRY MURDEN says Abrdn looks like losing its place in the FTSE 100, and risks losing even more – its independence
Since he took over as CEO at what became Abrdn in late 2020 Stephen Bird has rarely succumbed to any negativity around is remodelling plans for the former Standard Life Aberdeen. No surprise, then, that his comments about growth being delayed by ‘market turbulence’ caused another slide in the shares.
The markets are getting twitchy about a strategy that seems to be faltering and there is talk once again that the Edinburgh company could be a sitting duck for a predator.
When he arrived in St Andrew Square Mr Bird said the business was in need of renewal and he set about selling off unwanted divisions, scrapping units, changing the teams and those in charge, and – most significantly – buying businesses that fit with his plans for growing a new type of asset manager. The biggest of these was the DIY investment platform interactive investor, acquired for £1.5 billion at the end of last year.
Unfortunately, the market has been largely unimpressed by his attempts to improve on what had been seen as a company losing mandates, struggling to stem the outflows and build bottom line momentum.
In the three years after Standard Life and Aberdeen Asset Management completed their merger in 2018 the shares fell 26% leaving the company valued at £6bn, compared to £11bn when the deal was struck a year earlier.
But far from being turned around under Mr Bird’s grand plan the company has seen its value fall even more steeply. In the past 12 months the shares have plummeted 42% with its market capitalisation now just £3.5bn.
To add to the humiliation, John Moore, senior investment manager at Brewin Dolphin, says it looks “certain” to fall out of the FTSE 100 unless it can pull something out of the bag in the near term.
After the interim results were announced Mr Bird insisted his diversification strategy was working and the setbacks were a result of “the challenging global economic environment”. He played down speculation that Abrdn might have to cut the dividend for the second time under his tenure, saying that the dividend policy remained unchanged.
Investors will make up their own mind on whether the strategy is working and are likely to give the recent acquisitions more time to settle down.
However, the big US and Canadian institutions which have made big moves into the UK, buying the likes of RSA and Brewin Dolphin, will be keeping a close watch on Mr Bird’s progress and whether abrdn now represents too good an opportunity to overlook.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business