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View the article online at http://citywire.co.uk/wealth-manager/article/a658908

The end of extraordinary returns for Aberdeen?

by Dylan Lobo on Feb 14, 2013 at 13:32

Canaccord Genuity was among those impressed by the deal with the broker wasting little time in upgrading its rating to buy and price target to 460p.

'We estimate that the current acquisitions will add another 4p to this year’s earnings on a pro rated basis for the next 10 months. We estimate the SVG earnings on a 2% asset margin and some allowance for performance fee earnings. This should move our adjusted earnings per share to 30p from our current estimate of 26p,' the broker explained.  

It added: 'Integration will as always remain a risk but Aberdeen in hindsight has been able to produce quick integration results. We give the benefit of the doubt to management here.'

Peel Hunt, which has a hold rating on Aberdeen, was also more appreciative of the deals.

Analyst Stuart Duncan told the market: 'Strategically, the deals look interesting, expanding the group's capability in both the US and private equity funds of funds. While small, the deals will be accretive to earnings and be expected to enhance the organic growth rate.'

He added: 'Aberdeen does deserve a premium valuation, given the rate of growth being delivered.'

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