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Standard Life Aberdeen hit by £5.3bn Gars outflow

Outflows from Standard Life Aberdeen's Gars fund have continued, with £5.3 billion leaving the fund range in the first six months of 2018.

Standard Life Aberdeen hit by £5.3bn Gars outflow

Outflows from Standard Life Aberdeen's Gars fund have continued, with £5.3 billion leaving the fund range in the first six months of 2018. 

While this is a slight reduction from the £5.6 billion outflow experienced by the range in the same period last year, the continued high levels of outflows from one of the asset manager's flagship ranges will continue to raise concerns among investors. 

Across the entire Aberdeen Standard Investments fund management business £19.2 billion flowed out of funds in the first half of the year. 

Laith Khalaf, senior analyst at Hargreaves Lansdown, said the high outflows combined with the ongoing battle with Lloyds over the Scottish Widows fund mandate posed a test for the recently merged company. 

‘Part of the reason Standard Life and Aberdeen joined forces was to achieve greater scale, but continued outflows are testing that rationale. Over £16 billion walked out of the door in the first half of this year, and Lloyds is poised to withdraw a further £109 billion in the not too distant future,' he said.

'A new partnership with Phoenix could help to stem the tide in the longer term, however for now weak performance from key products like Gars keeps pushing flows into the red.

Without Gars Aberdeen Standard Investments would have seen net inflows of £900 million into multi-asset funds, down from the same period last year when it would have seen £1.8 billion of net inflows. 

Across the entire investment business assets under management decreased 3% to £557.1 billion from the end of last year to 30 June.  

Adjusted profit before tax for the investment business was £317 million over the half year, compared to £352 million in the first half of 2017. Lower fee revenue as a result of outflows was partially offset by reduced operating expenses in the division. 

The firm, co-led by chief executives Keith Skeoch (pictured left) and Martin Gilbert (right) said that since the merger of Aberdeen and Standard Life it has completed annual savings of £135 millions. It plans to eventually achieve £250 million of annual savings.

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