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Abrdn still under pressure even as markets rally

Abrdn will exit the FTSE 100 (Abrdn/PA)
Abrdn will exit the FTSE 100 (Abrdn/PA)

Abrdn, the branded Scottish investment giant, saw profit plunge 5% to £249 million putting further pressure on CEO Stephen Bird.

His highly controversial deal to buy intertactive investor has faced criticism. Some say he dramatically overpaid at £1.5 billion.

He says the group needed a shake-up, including cost cuts.

He told the stock market this morning:

Over the past three years we have reshaped the business to fit the modern investment landscape. We now have content and distribution aligned to the products and services clients need, and we are better positioned for future growth."

"The investment industry faced further structural and macroeconomic challenges during 2023 with a 'higher for longer' rate environment across developed economies adding sustained pressure on most asset classes."

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"The diversity of our group supported financial results in 2023. ii and Adviser are delivering, and we are scaling up these market-leading platforms to benefit from the long-term structural growth in UK savings and wealth. We are taking action to rebuild and grow profit in our Investments business. We have sharpened our focus on improving investment performance, streamlined our fund range, reduced costs by £102m in 2023, exceeding our £75m target, and we announced a new cost saving programme of at least £150m on the 24th January."

Abrdn has handed chief executive Stephen Bird a £800k bonus despite clients pulling out even more funds, leading to a slump in annual profits.

There were £17.6 billion of outflows as customers lost faith

Bird’s total pay for 2023 came in at £1.1m, with the board approving 36%n of the maximum for his bonus – 26.5% which was due to “non-financial metrics”, including stakeholder engagement and ESG.

Abrdn declared a final dividend for the year of 7.3p, giving a full-year dividend of 14.6p per share, unchanged from 2022.

The stock is down 50% since 2020.

Abrdn’s troubles are indicative of wider strife in the fund management sector, though it plainly has its own problems.