Aberdeen's Fund Success is a Nice Problem to Have

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Here's a statement you don't see often in fund managers' results: "We continue to work to moderate the scale of inflows." That's Aberdeen Asset Management talking about its GEM, or global emerging markets, business.

Chief executive Martin Gilbert says the GEM unit doesn't want to have too much cash sitting around earning nothing while fund mangers wait for the right investment opportunities; that would hamper performance and penalise long-standing investors. Aberdeen has asked intermediaries to take certain funds off "buy" lists and is now wondering whether to increase initial fees to dampen demand further.

It's a nice problem to have, of course, and Aberdeen's success in Asia (which represents about a third of the group's £187bn under management) is part of the reason why the share price has more than doubled in the past 18 months. Little 'ol Aberdeen is now a FTSE 100 company, which looked a very unlikely prospect a decade ago when the firm was knee-deep in split capital investment trust scandal on the home front.

Aberdeen's success in Asia has largely been driven by fund manager and board member Hugh Young, who went off to live in Singapore 20 years ago. In a UK fund management industry that likes to think of itself as global in outlook, it's extraordinary that rivals haven't been able to keep pace.

Powered by Guardian.co.ukThis article was written by Nils Pratley, for The Guardian on Monday 26th November 2012 17.39 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010


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