|Bid||277.10 x 0|
|Ask||277.10 x 0|
|Day's range||266.80 - 277.30|
|52-week range||219.10 - 374.63|
|Beta (3Y monthly)||1.26|
|PE ratio (TTM)||5.96|
|Forward dividend & yield||0.22 (8.17%)|
|1y target est||380.07|
G A Chester discusses the slump in Standard Life Aberdeen plc (LON:SLA) shares, and gives his view on the company's valuation and prospects.
Harvey Jones picks out two FTSE 100 (INDEXFTSE:UKX) companies that offer a higher yield than most rental properties but with a lot less bother.
(Bloomberg Opinion) -- Asset managers face “tough industry conditions with flows difficult to come by and fees under pressure,” says Standard Life Aberdeen Plc Chief Executive Officer Keith Skeoch. He’s not wrong; but competitors are weathering the ongoing storm far, far better than his firm is this year.As the chart above shows, SLA’s performance this year is dismal, with its shares languishing at their lowest level since March. Last week Skeoch made his first solo outing at the top of the greasy pole, unveiling the company’s first-half performance five months after Martin Gilbert was moved to the vice chairman role following a couple of years as co-CEO of the firm he and Skeoch created in a merger. The numbers didn’t look good.With $577.5 billion pounds ($700 billion) of assets under management at mid-year, it isn’t just the declining pound that’s prevented SLA from joining the $1 trillion club. Net outflows in the first six months of the year were 15.9 billion pounds; in the past two years, clients have pulled more than 87 billion pounds from the firm. The merger has turned out to be more of a distraction than a savior.QuicktakeActive vs. Passive InvestingIt’s not a good look when, a few minutes into your earnings conference call with analysts, you’re touting the recent appointment of a new head of human resources as one of the key leadership changes that will steady the ship. Asked on a media call on Wednesday about low morale at the company, Skeoch acknowledged that merging two different cultures has not been easy. “It’s something we take seriously and we’re working really hard at.”Lackluster performance by SLA’s portfolio managers has taken its toll on customer appetite for its funds. By the end of June, 47% of the assets managed by the firm were trailing their benchmarks on a one-year basis. While that’s an improvement on the 53% that were underperforming at the end of last year, it’s not exactly going to help the sales force when pitching to customers, even though the three-year performance improved to 65% of assets beating their benchmark.The most significant number associated with SLA, though, may be its market capitalization. At a smidgen over 6 billion pounds, its core business is valued at just 800 million pounds once you discount what it calculates are its 900 million pound stake in Phoenix Group Holdings Plc, the 1.5 billion pounds it has invested in HDFC Asset Management Co. and the 2.8 billion pounds it owns of HDFC Life Insurance Co.The first stake arose from SLA’s February 2018 decision to sell its insurance business to Phoenix. SLA views it as a strategic holding, along with its 30% ownership of India’s HDFC Asset Management. But the latter has to increase its publicly-traded float to a minimum of 25% in the next two years, up from about 14% currently; SLA says it is likely to participate in that process. The 23% holding in India’s HDFC Life is deemed non-strategic and has already been reduced by more than 6% by sales earlier in the year (although SLA says it’s obliged to hold 9 percentage points until March 2021).So let’s indulge in a game of fantasy M&A. Even at its reduced market capitalization of 6 billion pounds – down from almost 10 billion pounds a year ago – SLA would be a mouthful for even the most cash-rich of private equity buyers, especially after building in a takeover premium.But there’s 5.2 billion pounds ($6.3 billion) worth of publicly-traded assets on the balance sheet. And while it would take time to find buyers for those shares, it isn’t too much of a stretch to envisage a couple of private equity firms viewing SLA as a break-up candidate and teaming up to dismember the firm.Skeoch said last week that he’ll “remain focused on ensuring that we unlock the value of the assets on the balance sheet.” If he doesn’t get a wiggle on, he may find that others are more than willing to take SLA off the market and liberate those stakes for themselves.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Stephanie Baker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- In October 2016, Henderson Chief Executive Officer Andrew Formica was busy merging his firm with Janus Capital in a bid to join the fund management industry’s $1 trillion club.“Others will say they wish they’d done it,” he said. Fast forward to his current job running the much smaller Jupiter Fund Management Plc. “Big isn’t necessarily better,” he now says.The mergers that produced Janus Henderson Group Plc and Standard Life Aberdeen Plc were supposed to usher in a wave of consolidation in the European fund management industry. That hasn’t happened – and the dismal performance of the two companies since is proving to be a deterrent to any peers thinking of expanding through acquisition.On Wednesday, SLA reported that customers pulled 15.9 billion pounds ($19.4 billion) out of its funds, more than the 13.4 billion pounds analysts had expected.While rising markets boosted performance to drive assets under management up to 577.5 billion pounds by the middle of the year, they are still 5% below their level at the end of 2017. Scale, it seems, isn’t sufficient to attract customer flows.Last week, Janus Henderson reported its seventh consecutive quarter of withdrawals. Assets under management fell to $359.8 billion by mid-year, down from $370.1 billion a year earlier.Those outflows come as performance has suffered. By the end of June, just 66% of the firm’s funds had outperformed their benchmarks in the previous year, compared with 72% on a three-year basis and 80% over five years.It seems fair to speculate that the distraction of combining two firms has taken a toll on the portfolio managers. Melding two different cultures is never easy. That may well explain the reluctance of rivals to merge.For sure, Jupiter’s Formica is cutting his cloth according to his new situation. In his current berth he oversees about $56 billion. But it’s not just the smaller asset management firms that have been put off by the less than stellar experience of Europe’s two biggest fund mergers.Asoka Woehrmann, CEO of DWS Group GmbH, was asked on an earnings conference call a few weeks ago about his firm’s ambitions to become a top 10 player in the industry. “How many mergers happened in this industry and after three years, you are sitting asking the reason why?” he replied. “This is exactly what we are going to avoid.”With about $805 billion of assets, Woehrmann acknowledged that it would take a “transformational deal” for DWS to get into the top tier, where firms need at least $1.3 trillion of assets. But he stressed the need for patience. “To be big is not our main target,” he said. “Increasing shareholder value is the most relevant target.”That certainly hasn’t been the experience of the owners of SLA stock.Mergers may still happen. Deutsche Bank AG, which owns about 80% of DWS, still seems keen to find a partner for the asset manager. UBS Group AG is similarly anxious to do a deal with its funds arm. And now that GAM Holding AG has drawn a line under its troubles, a suitor may be tempted to bid for it.But in fund management, the firm’s most valuable assets walk out of the door every evening. SLA and Janus Henderson are stark reminders of the difficulties that the industry still faces – and that mergers are no panacea.(Corrects spelling of Janus in first paragraph.)To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
London's FTSE 100 snapped a six-day losing streak after a topsy-turvy session on Wednesday as investors composed themselves after sell-offs triggered by worries over the U.S.-China trade dispute and a weaker sterling supported exporter stocks. The mid-cap FTSE 250 rose 0.5%, helped by a post-earnings jump in Ultra Electronic and infrastructure products maker Hill & Smith.
British asset manager Standard Life Aberdeen's first-half profit missed forecasts on Wednesday as clients continued to pull money from higher-margin products, hitting fee revenue and sending its shares lower. SLA, Britain's second-biggest standalone money manager by market capitalisation, has suffered months of outflows and while the pace of demand to exit its funds slowed, outflows still exceeded a company supplied forecast of analysts. Many of SLA's rival asset managers, such as Schroders , have been hit by outflows during the first half of the year, amid weakening investor sentiment as trade war tensions rise and Brexit uncertainty weighs.
Lloyds Banking Group has agreed to pay Standard Life Aberdeen 140 million pounds to settle a dispute triggered by the proposed cancellation of a 100 billion pound asset management mandate. Standard Life Aberdeen will also continue to manage 35 billion pounds of assets under terms of the settlement, after winning a legal battle in May to stop Lloyds from cancelling the contract early. Lloyds had argued the 11 billion pound merger of Aberdeen Asset Management and Standard Life in 2017 gave just cause for it to cancel Aberdeen's 2014 contract because it considered insurer Standard Life as a "material competitor".
Standard Life Aberdeen will also continue to manage 35 billion pounds of assets under terms of the settlement, after winning a legal battle in May to stop Lloyds from cancelling the contract early. Lloyds had argued the 11 billion pound merger of Aberdeen Asset Management and Standard Life in 2017 gave just cause for it to cancel Aberdeen's 2014 contract because it considered insurer Standard Life as a "material competitor".
Veteran fund manager Martin Gilbert is to step down from the board of British fund firm Standard Life Aberdeen to take up a role as the chairman of digital bank Revolut, the Financial Times reported on Tuesday, citing sources.
Britain's financial watchdog has fined Standard Life Assurance Ltd (SLAL), part of insurer Phoenix Group, 30.8 million pounds ($38 million) for failures related to the sale of annuities. SLAL said some 80,000 clients were potentially sold the retirement product, which provides a regular income either for life or a set period, without financial advice.