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Scotland’s Biggest Fund Managers Boost Assets as Widows Trails

Scottish Widows Investment Chief Executive Officer Dean Buckley
Scottish Widows Investment Chief Executive Officer Dean Buckley said, “We made important changes to the business, including the restructuring of our equities business which helped deliver better outcomes for our clients.” Source: Scottish Widows Investment Partnership via Bloomberg

Scotland’s four largest money managers increased their assets by a combined 2.5 percent in the last three months of 2012, beating gains in global stock and bond indexes for a second successive quarter.

Led by Baillie Gifford & Co. and Aberdeen Asset Management Plc, assets rose to 587.8 billion pounds ($885 billion) at the end of the year from 573.4 billion pounds three months earlier, according to company filings and statements on their websites. That offset a decline at Scottish Widows Investment Partnership, the Edinburgh-based unit of Lloyds Banking Group Plc.

The rise in assets compares with a 1.5 percent gain in pound terms for the MSCI World Index, a benchmark of global stocks, over the same period. The Merrill Lynch Global Broad Index of bonds with a maturity of between seven and 10 years also advanced 1.5 percent. Standard Life Investments said yesterday there was growing appetite for stock funds. The Dow Jones Industrial Average hit a record this week.

“We are seeing a very early toe in the water with people moving away from low-yielding cash and bonds into equities,” Keith Skeoch, chief executive officer at Standard Life Investments, said on a conference call with reporters.

Combined funds at the four companies increased 9.1 percent in 2012, the statements show. The MSCI World Index gained 8.1 percent in pound terms over the 12 months, while the Merrill Lynch Global Broad Index advanced 9.1 percent, according to data compiled by Bloomberg.

Biggest Gainer

Baillie Gifford, owned by its partners, increased assets most in percentage terms in the fourth quarter and over 2012. Funds under management rose 4.9 percent in the October-December period, to 85 billion pounds, based on statements on the firm’s website. That was 22 percent higher than a year earlier.

Aberdeen’s funds under management rose 3.3 percent in the final quarter to 193.4 billion pounds, up 11 percent for the year, it said in a Jan. 17 statement. The company agreed last month to buy a fixed-income investor and a private-equity firm that will take assets above 200 billion pounds.

Standard Life Investments, Edinburgh’s largest fund company, said yesterday assets under management were 167.7 billion pounds on Dec. 31, up 2.6 percent in the quarter and 9.1 percent from the start of 2012.

Net inflows from external clients increased 42 percent to 6.1 billion pounds last year, insurance parent Standard Life Plc said in its earnings statement.

At Scottish Widows Investment, assets fell 0.1 percent to 141.7 billion pounds in the quarter, Lloyds said in its earnings report on March 1. That was 1.3 percent higher than a year earlier, while profitability increased, the company said.

Changing Managers

Scottish Widows Investment, Scotland’s third-largest money manager, is the only one of the top four fund managers not actively managing most of its equity investments. In April last year, the company said it was axing 27 of its 38 stock money managers and turning to computer-generated strategies, known as quant investing, to cut risk for clients.

“We made important changes to the business, including the restructuring of our equities business which helped deliver better outcomes for our clients,” Dean Buckley, chief executive officer of Scottish Widows Investment, said in a statement. “We also continued to build on the strong performance in our real estate and fixed-income businesses.”

The following is a list of the fund companies and their assets under management in billions of pounds as of Dec. 31, Sept. 30, and Dec. 31, 2011.

*T Fund Company 12/31/12 9/30/12 %chg 12/31/11 %chg

(bln pnds) Q/q Y/y

Aberdeen 193.4 187.2 +3.3 173.9 +11 Standard Life 167.7 163.4 +2.6 154.9 +9.1 SWIP 141.7 141.8 -0.1 139.9 +1.3 Baillie Gifford 85.0 81.0 +4.9 69.9 +22

Total 587.8 573.4 +2.5 538.6 +9.1


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