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Aberdeen's Gilbert shrugs off emerging market concerns
by Eleanor Lawrie on Jan 23, 2014 at 08:04
Aberdeen Asset Management's chief executive Martin Gilbert has shrugged off share price weakness, as investors' continue to shy away from volatile emerging markets.
'Aberdeen is regarded as a leading emerging markets house globally. So it is understandable that when there is negative sentiment towards developing economies the share price of companies like Aberdeen is sometimes affected,' he told Wealth Manager.
'Am I concerned about our exposure to emerging markets? No, we are long-term investors on behalf of our clients and also as a business our strategy is focused on the next five, 10, 20 years not short-term trends.'
Aberdeen revealed last week that it suffered net outflows of £4.4 billion in the last three months of 2013, compared with net outflows of £3.6 billion in the third quarter. Aberdeen has a strong proposition and presence in emerging markets, a region that underperformed in 2013 due to a combination of tapering fears, a growth slowdown and a slump in commodity prices. This has weighed on the asset manager's shares, which have fallen a little over 15% since the beginning of the year. The shares were trading at to 423.9 pence on Thursday at 8:20.
But the chief executive dismissed the idea that the business should rethink its allocation bias in the face of market weakness.
'I'm proud of our reputation as an emerging markets manager. We are a financially strong company and are well positioned on behalf of our clients to benefit from the continuing structural growth story of emerging markets,' Gilbert said.
When asked where the company would look for inflows, Gilbert said 'ironically, fixed income could be an interesting area this year'.
He acknowledged that although the '30-year bull market in fixed income is coming to an end,' he urges investors not to sell out of the asset class completely but rather diversify into areas like high yield and short duration.
Gilbert added that Aberdeen's £550 million acquistion of Scottish Widows Investment Partnership (Swip) was progressing 'as expected,' with the transaction to be completed within the first quarter, subject to regulatory approval.
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