Latest news with #Abrdn
Daily Mail
4 days ago
- Business
- Daily Mail
London's Junior AIM market to shrink by 20% as it's 'brutally knocked back' by takeovers or other exits
London's junior Aim market is on course to shrink by a fifth this year as it is 'brutally knocked back' by takeovers or other exits, figures show. Data compiled by fund manager Aberdeen and broker Peel Hunt show 61 companies, worth a combined £12.3billion, have announced plans to leave Aim, amounting to 20 per cent of the market by value. It is the latest blow to the City as London's undervalued listed firms fall victim to foreign predators or up sticks and leave for overseas markets. Aim's predicament highlights the difficulties facing smaller listed companies in particular. Some of those exiting are moving to London's main market. The report said that 'barely a week goes by' without an announcement of a company making such a move. A total of 89 companies left the junior exchange last year, with just 18 joining. Examples of recent departures include North Sea energy firm Serica, which is moving to the main London stock exchange, and healthcare firm Alliance Pharma, which has been sold to asset management firm DBay Advisors. Abby Glennie, co-manager of the Abrdn UK Smaller Companies Fund, said: 'AIM was once a thriving market, but it has been brutally knocked back by outflows in recent times. 'As a result, we're seeing many of the biggest and best AIM companies moving to a main market listing. 'It is a very ominous sign. Eventually we will be left with a tiny, illiquid market. That's fine for small, individual investors but will make it very hard to get large-scale institutional money into the growth companies of tomorrow. In that scenario, we need to be asking: 'How are we going to nurture the next generation of big UK companies?'' Proposals to boost Aim were included in the recent Mansion House Accord, under which pension firms have been persuaded to allocate 5 per cent of their funds towards UK assets. The agreement mainly covers private assets including real estate and infrastructure rather than publicly listed shares. But the latest version of the accord will now see shares listed on Aim or Aquis, a rival junior market, count towards the target.
Daily Mail
13-05-2025
- Business
- Daily Mail
Follow the money! Investors should pay attention to cheap UK smaller companies being snapped up
Investors should sit up and take notice of why private equity firms are snapping up cheap UK smaller companies, fund managers say. The UK's stock market listed smaller companies are repeatedly becoming the target of takeover activity, as bargain share prices and a lack of interest from investors offer a chance for private equity buyers to grab value. But the lack of upbeat sentiment from big investors provides an opportunity for smaller investors to profit, says Abbie Glennie, co-manager of Abrdn UK Smaller Companies Fund and the Abrdn UK Smaller Companies Growth Trust. He said: 'These discounts reflect the negative sentiment that we've seen towards UK smaller companies in recent times. True it's been a tough period for the sector – with weaker performance and tightening regulation. But ultimately negative sentiment is just that – sentiment.' The average premium paid in small cap takeovers compared with undisturbed share prices over the past 18 months is over 50 per cent, according to Ken Wotton, of Gresham House's Strategic Equity Capital. Clearly, buyers think there is value in UK small caps that investors aren't seeing. 'The UK is at multi decade discounts relative to global equities,' says another small cap manager, says Wotton. 'Depending on how small you go, the discount of smaller companies versus larger ones gets bigger.' Data from Aberdeen indicates that UK smaller companies are significantly undervalued based on 12-month forward price to earnings ratios compared with the ten-year average. Looking cheap is true for smaller companies around the world, says Aberdeen, with small caps trading at discounts globally: European small caps at a 28 per cent discount, US small caps at an 26.9 per cent discount and Japanese firms 19.4 per cent lower. But the tide may be turning on UK small caps. These are trading at a discount of 14.6 per cent to their ten-year average, after strong performance over the past month. Whereas, in March, the discount for UK small caps was the largest of any major market at 23.4 per cent. The uptick for UK smaller companies could reflect investors finally paying attention to a raft of buyouts and major investments. The highest takeover activity was seen within the tech, media and telecoms sectors, while consumer goods and retail also saw an uptick. Glennie added: 'Confidence in the US 'mega caps' has waned and investors are looking for ways of reducing their exposure. So interest in other asset classes is increasing. 'Within the UK, people are more favourable towards domestically focused UK companies than we've seen in many years. All this could be positive for UK smaller companies. 'So far we haven't seen this transform into a major shift in sentiment towards UK smaller companies and flows into the asset class – but the foundations for a turnaround are being laid.' Compared with private market valuations, small caps on public markets are trading at discounts of around 30 per cent. In some cases, Wotton says, these discounts reach 50 per cent. 'That's creating a big dislocation gap arbitrage opportunity between private markets, international markets and the UK small Caps,' Wotton said. It is this disparity between prices that is creating interest from potential buyers and leading to elevated takeover activity in the sector. Wotton said small cap buyers range from US and European private equity firms to corporate strategic buyers from the UK, Europe and the US. 'The consistent theme is not who's buying, the consistent theme is the valuations of what's being bought,' Wotton said. What do takeovers mean for small caps? As long as UK small caps are widely undervalued, they will remain potential takeover targets. 'I would expect takeover activity to continue to be elevated,' Wotton told This is Money. 'I think that what changes it will be valuations moving up in the UK, small cap sector or alternative valuations moving down in other areas.' Wotton adds: 'It's clear that there are valuation opportunities there because that's why there are takeovers happening at a premium.' There are concerns that one effect is that the UK small cap market is gradually being hollowed out by private equity buyouts and delistings. A downturn in UK IPO activity is also compounding the dire situation the small cap market finds itself in. Some firms are breaking that cycle, such as the listing of a new British bitcoin holding company, by Smarter Web Company, but these instances are rare. Last year, Peel Hunt said the FTSE SmallCap index could cease to exist by 2028 if current trends continue. An extreme scenario, perhaps, but Wotton says there is little indication that investors are changing their minds on small caps. He said: 'I've been expecting the elevated level of takeover activity over the last couple of years to be the catalyst which really shines a light on this valuation discrepancy and attracts more money back into the UK small cap market. 'That hasn't really happened and you've seen instead you've seen this kind of relentless month on month on month outflows from UK funds.' How to profit from UK smaller companies Fund managers, Wotton says, aren't powerless to stop their holdings falling victim to opportunistic takeovers. Strategic Equity Capital, the investment trust that Wotton manages, zeroes in on the long-term fundamentals of the firms it invests in, 'trying to cut out the noise of short term sentiment' and 'really focus on the long term business fundamentals and quality companies trading at attractive prices'. However, beyond this, Wotton says the key is that Strategic Equity Capital is prepared, and willing, to actively engage with companies they invest in. Strategic Equity Capital, Wotton said, is willing to take higher stakes in businesses, allowing them to be proactive in engaging with the companies. He said: 'We make a very clear distinction between activism - we do not consider ourselves to be activists - and constructive active engagement, which we do consider ourselves to deploy. 'This means working with management teams and boards that having an input into key issues which we think are really important for shareholder value perspective such as the business strategy, capital allocation, board composition and management incentives being aligned with shareholder value over the longer term.' Being engaged, he says, also allows them to make introductions to people or firms that can help specific companies, as well as to 'support value creation and hopefully add value ourselves along the way.' The aim of this, of course, is to improve small cap valuations to a point they can't be snapped up at discounts by private equity firms. However, this strategy can also help to fight off unwelcome takeover attempts. He adds: 'In an environment where there's lots of takeover approaches, some of which are quite opportunistic because of the low valuations, the last thing that we as a shareholder or the management team or the board want is for someone to come along at a 30 per cent premium to a depressed price and then shareholders capitulate and the company gets sold.' 'Where we've got a big stake, potentially we can, we can block that from happening and we have done that in a few situations. 'So as a board, if you have good supportive dialogue with [an investor] then you know that as long as you're doing the right things and it's aligned with what we all kind of agreed is the right thing to do, we're not going to capitulate in that situation.'
The Independent
30-04-2025
- Business
- The Independent
Aberdeen assets contract as clients withdraw more than £5bn
Finance giant Aberdeen saw its assets shrink over the latest quarter as clients withdrew more than £5 billion amid volatile conditions in global financial markets. Shares in the company still made gains on Wednesday morning despite the reduction in assets. The asset management firm, which added vowels back to rebrand from Abrdn last month, revealed total assets under management of £500.1 billion for the quarter to March 31. It said this dropped from £511.4 billion over the past three months, as it was impacted by a net outflow of £5.2 billion. The company has come under pressure in recent months amid increased client outflow and has sought to reduce costs with rounds of job cuts. However, the firm highlighted improvement in its Interactive Investor (ii) platform business, which reported a net inflow of £1.6 billion for the quarter as it benefited from market volatility driving trading activity. Jason Windsor, chief executive of Aberdeen, said: 'Our strategy is to become the UK's leading wealth business and to reposition our investments business to areas of strength and market growth. 'So far this year, we have made good progress against these objectives, despite the current heightened levels of market uncertainty. 'Interactive investor has seen significant growth in new customers, and in trading volumes, which have risen to record levels during the recent period of market volatility.' Rae Maile, research analyst at Panmure Liberum, said: 'The company has delivered assets under management in line with our estimates but with some significant signs of promise for the future: activity levels at ii have been strong and customer acquisition has continued; adviser net outflows have slowed usefully on reduced redemptions; investments saw outflows as anticipated but has landed a material new mandate in April. 'The company has also reiterated its profit ambitions for full-year 2026, which remain ahead of our estimates, despite recent market volatility.' Shares moved 1.4% higher as a result.
Daily Mail
30-04-2025
- Business
- Daily Mail
Aberdeen suffers £5.2bn in outflows as volatility hits markets
Aberdeen suffered £5.2billion in net outflows in the first quarter, as the FTSE 100 fund manager was hit by weak markets and a big redemption in its investments division. The asset manager, which resestablished its vowels in another rebrand last month, is currently undergoing a strategy revamp led by boss Jason Windsor after years of tough trading conditions. It told investors it remained committed to its financial year 2026 targets, despite mixed flows in the first quarter of this year. The large outflow at the start of the year is understood to primarily reflected a previously guided £4.2billion redemption by its biggest client Phoenix. Abrdn continues to aim for an adjusted operating profit above £300million and net capital generation of around £300million. The fund manager said its assets under management reduced to £500.1billion at the end of March, from the £511.4billion at the end of 2024. The group's assets under management and administration slipped to £500.1billion, reflecting market weakness and a large previously flagged redemption, but strong growth at Interactive Investor helped offset some of the drag. Aberdeen saw £1.6billion in net inflows and a 9 per cent year-on-year increase in customers to 450,000, including a 29 per cent surge in higher-value SIPP accounts. Adviser outflows of £600million were the lowest in over a year as service levels improved. The group's investments arm saw £6.4billion in outflows, largely due to a £4.2billion low-margin mandate redemption. Aberdeen said it picked up a £6billion pound quantitative strategies mandate this month after the quarter ended. Boss Jason Windsor said market volatility since Donald Trump's announcement of trade tariffs on 2 April had led to record trading volumes at interactive investor, but had not otherwise had a big impact on the business so far. 'We're a long-term player with a long-term focus, and despite the new uncertainty created in recent weeks, we've made good progress towards our objectives,' Windsor said. Windsor has reportedly begun cutting costs at Aberdeen and shedding under-performing businesses, but downplayed the possibility of a wider restructure involving the hiving off of its asset management division to focus on wealth. 'There is no effort or energy going in in that regard at all. We're very happy with the configuration of the group,' Windsor said on Wednesday. In March, the asset manager announced a rebrand to Aberdeen, having been previously called Abrdn. The group said the rebrand was a 'pragmatic' decision required to 'remove distractions.'
Scotsman
30-04-2025
- Business
- Scotsman
Aberdeen Group sticks to guns despite tariff turmoil as Interactive Investor blossoms: shares rise
'Our strategy is to become the UK's leading wealth business and to reposition our investments business to areas of strength and market growth' – Jason Windsor, CEO Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Aberdeen Group has suffered fallout from the recent market turmoil but strong growth at its Interactive Investor business has helped offset some of the drag. The Scottish funds giant, which recently ditched its derided Abrdn brand name, said it was fully committed to its targets for the 2026 financial year. That came despite assets under management and administration (AUMA) dipping to £500.1 billion in the first quarter, from £511.4bn at the tail end of last year, reflecting global stock market weakness and a previously flagged redemption. Advertisement Hide Ad Advertisement Hide Ad However, the group's latest trading update also highlighted strong organic growth at Interactive Investor, which was bought by Aberdeen for £1.5 billion in late 2021, with year-on-year increases in total customers of 9 per cent to 450,000 and a 29 per cent rise in self-invested personal pension (SIPP) clients to 88,000. The Interactive Investor business appears to have benefited from recent national advertising and marketing activity. There were strong inflows of £1.6bn at the platform during the quarter. A sign at Abrdn's offices in Edinburgh's South Gyle area. The Scottish investment group is undergoing a rebrand from Abrdn to Aberdeen Group. Picture: Scott Reid Adviser net outflows of £600 million were the lowest in more than a year as service levels improved. The previously highlighted £4.2bn redemption from a low-margin mandate was the main driver of net outflows of £6.4bn in the investments division. Aberdeen said it remained committed to its 2026 targets of adjusted operating profit above £300m and net capital generation of around £300m. Chief executive Jason Windsor said: 'Our strategy is to become the UK's leading wealth business and to reposition our investments business to areas of strength and market growth. So far this year, we have made good progress against these objectives, despite the current heightened levels of market uncertainty. Advertisement Hide Ad Advertisement Hide Ad 'Interactive Investor has seen significant growth in new customers, and in trading volumes, which have risen to record levels during the recent period of market volatility. Jason Windsor is Aberdeen Group's chief executive. 'In adviser, net outflows improved in [the first quarter], and while there remains work to be done, we are encouraged by the business's progress, most notably in meeting or exceeding client service targets. 'In Investments, [first quarter] flows were impacted by the large redemption we noted at our full year results. We saw good inflows in fixed income in the quarter, but outflows in equities remained elevated. 'A major quant win in April has taken [investments] net flows to positive in the year to date. With clear strategic priorities and an ongoing focus on efficiency, we continue to target a material uplift in profitability,' he added. Advertisement Hide Ad Advertisement Hide Ad Shares nudged higher in Wednesday morning trading in London. Analysts at Panmure Liberum noted: 'The company has delivered assets under management in line with our estimates but with some significant signs of promise for the future. 'Activity levels at Interactive Investor have been strong and customer acquisition has continued. Adviser net outflows have slowed usefully on reduced redemptions. The investments [division] saw outflows as anticipated but has landed a material new mandate in April. 'The company has also reiterated its profit ambitions for [the 2026 financial year], which remain ahead of our estimates, despite recent market volatility. Improving business momentum underpins why we believe the shares to be materially undervalued.' Advertisement Hide Ad Advertisement Hide Ad In March, the group announced that it was ditching the Abrdn name to become Aberdeen as it posted the first increase in annual profit for three years. Former chief executive Stephen Bird, who stepped down in May 2024, led the change from Standard Life Aberdeen to Abrdn in 2021. However, announcing its 2024 full-year results, the Edinburgh-headquartered group said it would be changing its name to Aberdeen Group plc. Windsor told investors: 'This is a group to be proud of, with a promising future. We will deliver by looking forward with confidence and removing distractions. To that end, we are changing our name to Aberdeen Group. This is a pragmatic decision marking a new phase for the organisation, as we focus on delivering for our customers, people and shareholders.' In 2021, the group said it planned to create new branding after the funds firm sealed a deal to sell the 196-year-old Standard Life brand to Phoenix Group. Insurer Phoenix Group had acquired Standard Life Assurance in 2018. Advertisement Hide Ad Advertisement Hide Ad At the time, former boss Bird said: 'Our new brand Abrdn builds on our heritage and is modern, dynamic and, most importantly, engaging for all of our client and customer channels.' The results for 2024 revealed a full-year profit before tax of £251m, compared with a loss of £6m in 2023. Adjusted operating profit came in at £255m, up 2 per cent on the year before. At its investment arm, total assets under management and administration rose by 3 per cent to £511.4bn. Windsor said: 'The group grew profit in 2024 for the first time in three years, with each business increasing its contribution. As our momentum shifts to growth, we have a clear focus on improving client experience and shareholder returns. 'We have strengthened and streamlined our senior leadership team and, with our sharper focus, we are committing to better results again in 2025 and 2026. Alongside our results, we are setting out our strategy to become a leading wealth and investments group, with new 2026 targets that underline the potential for the profitable growth we see in all of our businesses.' Advertisement Hide Ad Advertisement Hide Ad
