Abrdn cuts jobs as cost pressures grow

UK investment group Abrdn is axing about a fifth of its multi-asset team as part of a broader restructuring, highlighting the pressure on midsized asset managers to preserve profits by deepening cost cuts.

Staff were told last week that at least 27 roles, including fund managers and investment specialists, would be offered voluntary redundancy in a revamp of the division, according to people familiar with the matter.

Abrdn launched a review of the multi-asset solutions unit, which has about 140 staff and oversees £180bn, earlier this year. The team manages funds that invest in assets from equities to commodities.

The division’s chief investment officer, Aymeric Forest, left in February just as the review to “streamline and simplify procedures” was launched.

Forest also led the group’s Global Absolute Return Strategy, which was one of the most popular retail funds in the UK with £20bn of assets at its peak. However, a period of underperformance has seen the fund shrink to less than £1bn.

Abrdn, which manages about £500bn in assets, is one of several midsized groups facing a jump in costs and outflows following a turbulent year for markets.

Some rivals have also embarked on restructurings. Jupiter Asset Management has merged or closed smaller funds and cut jobs, under chief executive Matthew Beesley.

Despite these efforts, analysts and bankers say the industry is set for further consolidation as the growth of passive investing chips away at the fees asset managers can charge and markets navigate a world of higher interest rates and inflation.

“The long only active asset management industry faces significant structural challenges with strategic repositioning being largely solved through mergers and acquisitions,” said Vincent Bounie, senior managing director of Fenchurch Advisory. “Firms cannot afford to stand still and differentiation is critical.”

Abrdn resurrected the role of chief investment officer earlier this year, poaching Peter Branner from Dutch company APG Asset Management, in a bid to improve the group’s performance.

Since joining in 2020, chief executive Stephen Bird has sought to revive the fortunes of Abrdn, which was created in 2017 from the merger of Standard Life and Aberdeen.

Bird snapped up the investment platform Interactive Investor for £1.5bn in a bid to capitalise on demand from customers to buy investments directly, rather than through intermediaries. The company also offers services for independent financial advisers and a mix of funds from private assets to equities.

Bird has restructured the business, merging or closing some 120 funds, and is seeking to offload its private equity arm, which runs about £14bn. The fund group was also renamed Abrdn from Standard Life Aberdeen.

Abrdn endured a bruising period last year after it was ejected from FTSE 100 before it was readmitted in December.

In a statement, Abrdn said: “The starting point for the redesign was an open acknowledgment of the need for change, any restructuring decisions have and will be as a direct result of collaboration and engagement. The end state will ensure we have a strong, client-led proposition and the building blocks to ensure we are future fit.”