Will Aberdeen Asset Management be sold?

By Madhvi Mavadiya | 2 November 2015

There were many speculative reports released last week surrounding whether or not investment management company Aberdeen Asset Management will be sold. This is due to increased share price and the emerging market infrastructure being in turmoil recently after events in the Chinese economy.

The Telegraph reveals that there may be a sense of advertisement in how the company is marketing itself but the organisation denied claims of this.

A spokesman for the CEO Martin Gilbert said that he has never approached anyone about buying the business and the assumption that this would happen was based on how Gilbert was criticised for his involvement in the split capital investment scandal in the early 2000s.

The scandal that nearly led to the resignation of Gilbert saw Aberdeen Asset Management lose 97% of its value and tens of thousands of investors lost money in low risk strategies, the Telegraph reports.

Peter Lenardos, analyst at RBC Capital Markets said that selling at a point of weakness would be unexpected. “We believe that selling now would be an admission of failure, and that a potential buyer would clearly understand the challenges that Aberdeen is facing and reflect that in its determination of value for the company,” Lenardos said.

The Telegraph commented on the increased share price after talks of a potential buy out and how the reason for this could have been because of short sellers, who were loaned out 10% of Aberdeen Asset Management’s asset value, and in turn, decided to buy shares after building up profits after a year.

A recent trading update revealed that because clients withdrew from their Asian investments, assets under management fell by £23.3 billion in a matter of months, despite having 60% of the company’s £107.6 billion equity portfolio in Asia Pacific or emerging markets at the end of last year. This left the group exposed during Chinese Black Monday earlier this year. 

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