‘A tumultuous time’: The ups and downs of Bird’s time at the top of Abrdn

Abrdn's Stephen Bird is off. Jason Windsor, who is currently the chief financial officer, has been appointed as the interim chief while the formal search process is ongoing.

News that Stephen Bird is to fly the Abrdn nest took the City by surprise this morning.

Bird was brought in to turnaround the company just under four years ago as it struggled to find its footing following a demerger with the old Standard Life insurance business. But months into the job and the former Citigroup executive had the pandemic on his plate.

While chairman Douglas Flint praised the outgoing chief this morning for having spearheaded a fundamental reshaping of the company, analysts suggest his legacy is, at best, mixed.

“He was brought in on a mandate to turn around the company and yet their results have continued to be lacklustre,” Michael Born, Investment Research Analyst at Morningstar, told City A.M. 

“He was brought in on a mandate to turn around the company and yet their results have continued to be lacklustre.”

Michael Born, Investment Research Analyst at Morningstar

While sky-high inflation and worries about economic growth have presented huge challenges for the asset management sector, experts say the company can’t blame its performance solely on these external factors.

“Performance woes have continued to follow many of the flagship strategies, leading to tumultuous years of outflows,” Born added. “Whilst Bird oversaw a programme of concentrating on their core competencies, disposing of assets such as their US-based private equity business, and implemented a cost-cutting programme including job cuts over Q1, it hasn’t done enough to fix the core issue at heart.”

While cutting costs, and hundreds of jobs, Bird’s tenure will also be remembered for his decision to cut vowels, when in 2021 the firm made the decision to change its name from Standard Life Aberdeen to Abrdn.

The name, which has led the firm being known as the vowel-deprived asset manager on second mention, has, somewhat understandably, been repeatedly ridiculed.

And while Abrdn’s chief investment officer, Peter Branner, recently complained that the company was being bullied by the press over its name – no jokes were spared for Bird’s departure.

“He was a consonant force,” one Linkedin user quipped, while others chipped in with disemvoweled variations, such as “Srry yr lvng”.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said that it has certainly “been a tumultuous time for Abrdn while Stephen Bird has been at the helm”.

The company was twice ejected from the FTSE 100 during his time at the top, with shares in the firm shedding around half their value.

Streeter said that under his tenure the company has been trying to keep revenue moving in the right direction through acquisitions.

Its purchase of Interactive Investor should serve the company well. This acquisition, Streeter says, “should provide a relatively stable source of assets for the group given its one of the UK’s biggest direct-to-consumer investment platforms”.

Where next for the firm?

Well, usually change at the top unsettles investors.

But, despite a swing earlier today, its share price closed up just over 1.6 per cent.

Streeter said the share price nudging higher suggests many investors were perhaps keen for new leadership.

She added that the focus for interim CEO and former finance chief Jason Windsor, should be on restoring the investment division’s profitability.

However, in the longer term some are expecting calls for a break-up to rear their head once again. Although Bird was among the champions of a carve-off its investment management arm last year, his departure could now act as a watershed moment for the company to revive a rethink of its strategy.

“We view the change of leadership as an opportunity for someone to take a fresh look at the best strategy to take abrdn forward,” RBC analysts said in a note, adding that some investors wanted a break-up of the company, though they viewed this as challenging.

Whoever Abrdn picks to take over in the long run will be crucial in defining whether this is a positive turning point for the firm.

“Seeing someone in the top job with prior experience of successful turnarounds and knowledge of key markets like the UK and Asia would make for good characteristics, but ultimately the proof will be in the pudding,” Born said. “We have no doubts there are a lot of difficult decisions ahead.”