British investment group Abrdn is shedding about a fifth of its multi-asset team as part of a broader restructuring, highlighting the pressure on medium-sized asset managers to maintain profits by deepening cost cuts.
Employees were told last week that at least 27 positions, including fund managers and investment specialists, would be offered voluntary redundancy in the department’s renovation, according to people familiar with the matter.
Abrdn launched a review of its multi-asset solutions unit, which has around 140 staff and oversees £180bn, earlier this year. The team manages funds investing in assets from stocks to commodities.
The division’s chief investment officer, Aymeric Forrest, left in February just as the “streamlining and streamlining” review began.
Forrest also led the group’s global absolute return strategy, which was one of the most popular retail funds in the UK with assets of £20 billion at its peak. However, a period of underperformance saw the fund shrink below £1 billion.
Abrdn, which manages around £500bn of assets, is one of several medium-sized groups facing a jump in costs and outflows after a turbulent year for markets.
Some competitors have also embarked on restructuring. Jupiter Asset Management has merged or closed small funds and eliminated jobs, under the direction of CEO Matthew Beasley.
Despite these efforts, analysts and bankers say the industry is poised for further consolidation as the growth of passive investment tranches away from the fees asset managers can charge and markets navigate a world of high interest rates and inflation.
“The long-active asset management industry faces significant structural challenges with strategic repositioning largely resolved through mergers and acquisitions,” said Vincent Bonney, Senior Managing Director of Fenchurch Consulting. “Companies can not stand still and differentiation is critical.”
Abrdn reprized the chief investment officer role earlier this year, poaching Peter Branner of Dutch firm 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 were created in 2017 from the merger of Standard Life and Aberdeen.
Baird snapped up investment platform Interactive Investor for £1.5bn in a bid to capitalize on demand from clients to buy investments directly, rather than through brokers. The company also provides services to independent financial advisors and a mix of funds from private assets to equities.
Baird has restructured the business, merging or closing around 120 funds, and is seeking to offload its private equity arm, which manages around £14bn. The name of the box group was also changed to Aberdn from Standard Life Aberdeen.
Abrdn suffered bruising last year after being kicked out of the FTSE 100 before being admitted back in December.
In a statement, Abrdn said: “The starting point for the redesign was an explicit acknowledgment of the need for change, and any decisions to restructure were and will be a direct result of collaboration and engagement. The end state will ensure we have a strong customer-led proposition as well as the building blocks to ensure we are fit for the future.”