Standard Life Aberdeen’s ‘reset guy’ promises growth revival

Standard Life Aberdeen’s new chief has vowed to transform the Edinburgh-based asset manager into a “competitor fit for the twenty-first century” after leading a review of the problems that have beset the underperforming £456bn fund group for years.

“I am the reset guy,” Stephen Bird said in an interview with the Financial Times. “We have set higher growth ambitions for asset management, adviser platforms, savings and wealth and strategic partnerships.”

Mr Bird inherited a company that has shrunk since 2017 when his predecessors Keith Skeoch and Martin Gilbert created what was then Europe’s second largest fund manger by assets after merging Standard Life with Aberdeen Asset Management.

The enlarged company’s market value has fallen by almost half from a peak of £13.3bn in October 2017 to £6.8bn owing to asset sales and hefty investor outflows. The FTSE 100 group’s high dividend yield is an important share price support, but some analysts argue the payout is vulnerable because it is not covered by earnings.

Gordon Aitken, an analyst at RBC in London, forecasts net investor outflows of £7.9bn for 2020, lifting withdrawals over the past four years to £97.2bn.

Since Mr Bird took the helm in September, the former Citigroup banking executive has reshuffled SLA’s top ranks, promoting Chris Demetriou and René Buehlmann to lead regional units. Campbell Fleming, global head of distribution, left last year.

Mr Bird said he had built a team to hunt for potential acquisitions. Pressure on fees, rising costs and intense competition from US passive giants BlackRock and Vanguard has led to a spate of deals in the fund sector. Analysts predict significant further consolidation in the coming years. SLA was named by Citigroup this month as one of the “most likely” acquirers of fund managers alongside Credit Suisse, UBS, BNP Paribas, Amundi and Schroders.

SLA has also been mentioned as possible suitor of France’s Lyxor, Europe’s third largest exchange traded funds manager.

Mr Bird appeared to pour cold water on this suggestion. “I have done a lot of acquisitions and we have to be very careful about potential deals. Deals can get done quickly and then regretted for a long time afterwards.” He said preferred targets would expand SLA’s private markets, wealth and fledgling retail investor businesses.

Analysts have also noted SLA has about £1.7bn of excess capital and could raise debt against its holdings in the insurer Phoenix group and India-based HDFC. “A fortress balance sheet is important in a ‘trust business’ such as asset management,” Mr Bird said.

Chris Turner, an analyst at Berenberg in London, said Mr Bird was interested in technologies, such as cloud computing, ultrafast networks and smartphones, that have transformed business models across Asia. “Mr Bird has a bias to action and could be quite radical,” said Mr Turner.