ABRDN is set to be reinstated as an FTSE 100 company, driven by its share price increasing significantly due to anticipated capital distribution amongst shareholders. Since August, when FTSE removed it from the premier league of British businesses, which had been the reality since the combination of Standard Life and Aberdeen Asset Management in 2017, the investment manager’s stock has risen 35%.
According to data provided by FTSE Russell, it is expected that the company will be back among the most significant reserves in the United Kingdom next week as part of the index rebalancing process. The current market valuation stands at $4.1 billion despite a 20% drop in value year-to-date, while on the other hand, other entities have almost recovered all losses recorded during 2022.
Losses at the Beginning of the Year
ABRDN, a company that manages over £508 billion, has seen a significant decline in its share price throughout the year: reducing by around 40% from January to August. This is indicative of broader market trends. However, the company has been affected more than comparable firms due to doubts surrounding their investment strategies and decision-making – including the expenditure associated with purchasing Interactive Investor at a time when market prices were high. The effects are considerable, as evidenced by the pre-tax loss of £320 million announced in the first half of 2020. These issues have also impacted active asset managers, as investors are increasingly opting for cheaper passive solutions instead.
ABRDN Chief Executive Shares His Views on Its Return
The changes implemented by top executives of Aberdeen, such as the completion of the Interactive Investor deal and a substantial capital return program, have aided in reversing the company’s struggles. Stephen Bird, CEO of Aberdeen since September 2020, has expressed that he is actively striving to accelerate the transformation process.
In a statement to the Financial Times following their first-half earnings release, he commented on his efforts to expedite the method with care and caution. This is despite certain obstacles encountered; for instance, some underperforming funds need to be rationalized, and overall frustration at how slow progress has been made over the past five years since the merger.