Abrdn has been hit by bigger than expected outflows, largely impacting its UK property portfolio.
While net operating revenue increased by 4% to £721m for the first six months of the year, the 10% rise in the FTSE 100 asset manager’s adjusted operating profit to £127m was lower than the £133m forecast.
Assets under management slipped to £495.7bn from £500bn in December, largely a result of falling valuations and higher than expected net outflows of £4.4bn. Much of that movement was in its UK property portfolio.
Abrdn’s UK real estate AUM was £19.3bn at 1 Jan 2023. The first half of 2023 saw gross inflows of just £100m, against redemptions of £700m. Meanwhile, market movement led to the value of the portfolio falling by £2.2bn. By 30 June the holdings were worth £16.5bn, a fall of £2.8bn.
That is a marked contrast to the first half of 2022, when net outflows of £300m were offset by market movements adding £800m to valuations.
European and global real estate AUM was also down, with Europe falling by £700m to £13.6bn and global down £300m to £1.3bn over the half-year.
Chief executive Stephen Bird said: “If 2022 was one of the hardest investing years in living memory, 2023 is shaping up to be equally challenging. Geopolitical risk is back. Inflation is back. Credit risk is back.”
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
