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Aberdeen Has $5.2 Billion of Outflows on Emerging Markets

Aberdeen Asset Management Plc CEO Martin Gilbert
"June was a very volatile month with the U.S. really calling the end of quantitative easing," said Martin Gilbert, the chief executive officer of Aberdeen Asset Management Plc, in a telephone interview. Photographer: Simon Dawson/Bloomberg

Aberdeen Asset Management Plc, Scotland’s largest money manager, reported its first quarterly outflows since 2011 as investors pulled money from its equity and emerging-market funds.

Customers withdrew 3.4 billion pounds ($5.2 billion) in the three months to the end of June, the first quarterly net outflow since Dec. 31, 2011. Clients removed about 2.5 billion pounds last month, the Aberdeen, Scotland-based firm said in a statement today.

“Flows and investment performance are disappointing and below our expectations,” Peter Lenardos, an analyst at RBC Capital Markets in London, wrote in a report to clients today. “The only good news is that despite the flow and investment performance figures, because of business mix changes and market performance so far in the current quarter, there should be no material changes to our forecasts.”

Equities tumbled in June and bond yields climbed after Federal Reserve Chairman Ben S. Bernanke said the central bank may “moderate” the pace of its $85 billion a month in debt purchases this year if the U.S. economy improves sustainably. Yields on benchmark 10-year Treasuries climbed to 2.5 percent for the first time since 2011.

Aberdeen said assets under management fell to 209.6 billion pounds in the quarter from 212.3 billion pounds at the end of March as net flows to the company’s emerging market debt funds “turned negative” in the last few weeks of the quarter.

First Outflows

The company also posted its first outflows in its equities funds since 2008 as one client pulled 500 million pounds out of U.S. equities and the company restricted new business in emerging-markets stocks.

“June was a very volatile month with the U.S. really calling the end of quantitative easing,” said Chief Executive Officer Martin Gilbert in a telephone interview. “We are at the end of a 30-year bull market and there has been a lot of volatility so I am not surprised there were outflows.”

Gilbert reiterated Aberdeen’s strategy to increase the dividend at a “reasonable rate” and buy back shares with any excess cash toward the end of the year. The company may continue to make “small to highly accretive” acquisitions after completing two transactions in the quarter.

The shares dropped 1.3 percent to 402.5 pence in London trading today, for a market value of about 4.8 billion pounds.

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