Lionel Laurent is a Bloomberg Gadfly columnist covering finance and markets. He previously worked at Reuters and Forbes.

Aberdeen Asset Management is running hard to stand still. Just as this year's earlier turmoil in emerging markets showed signs of easing, Brexit struck.

Knock, Knock
Property is a small slice of Aberdeen's assets under management
Source: Company reports

Monday's trading update from the Scottish money manager was, at first glance, reassuring: assets under management climbed almost three percent in the three months through June. The fall-out from the suspension of its property fund following the Brexit vote looked contained, and emerging markets showed signs of a rebound.

Stubborn Outflows
Net fund flows for the June calendar quarter at Aberdeen showed little sign of recovery
Source: Company reports

More troubling, though, are the signs the fund manager has been unable to staunch outflows. Monday marked the 13th consecutive quarter during which clients pulled more money than they added. The 8.9 billion pounds ($11.7 billion) of outflows erased almost all the investment gains the money manager made in the period.

Exchange Gains
A weak pound helped Aberdeen to increase funds under management
Source: company filing

Assets under management were flattered by an 8.5 billion-pound boost from the weak pound, helping to lift the value of the fund manager's overseas holdings.

Stock Rally
Emerging markets in Asia have rebounded from their earlier losses this year, helping Aberdeen
Source: Bloomberg

For CEO Martin Gilbert, the task of attracting assets may get easier if emerging markets continue their rebound and the global economy grows -- but Brexit represents a clear threat on the home front.

Aberdeen knows it has to keep cutting costs. It plans to make 70 million pounds in annual savings. If the second quarter -- only one week of which covered post-referendum trading -- proves to be as good as it gets, it will have to deepen those cuts.

Even if Aberdeen succeeds, the company still faces the structural problem facing the active-management business: bored by by under-performance, investors are increasingly shifting assets into low-cost index funds, Moody’s warned on Monday. The industry, according to the ratings company, will have to shrink "substantially."

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Lionel Laurent in London at

To contact the editor responsible for this story:
Edward Evans at