Standard Life Aberdeen’s biggest shareholder has ditched a stake worth almost £350 million.
Japanese financial giant Mitsubishi UFJ Trust and Banking Corporation, which controlled a 6% interest in SLA, sold its 148.6 million shares for around £349.3 million on 15 February.
Mitsubishi sold the shares at £2.35 each, representing 132% return on the amount it paid for what was then Aberdeen Asset Management shares just over 10 years ago. This compares to a 119% return on the FTSE.
SLA's share fell 6% on Friday on the news. At 8.30am this morning they had added 1.95% to stand at 235.7p, around 44% beneath their 12-month peak.
It is understood there was significant interest in Mitsubishi's stake from a mix of UK and European investors, with the shareholding three times oversubscribed.
The disposal means SLA has lost its two biggest investors in less than a year after Lloyds sold its £344 million holding last summer.
Mitsubishi struck a strategic alliance with the Scottish firm back in 2008 when it bought a 10% stake in Aberdeen Asset Management. Through the arrangement the firm, which is a subsidiary of Mitsubishi UFJ Financial Group (MUFG), had the exclusive rights to distribute Aberdeen’s product range to Japanese institutional investors.
In a statement on Friday afternoon, MUFG said the decision was part of its programme to improve efficiency as part of its ‘reimagining strategy’ announced on 15 May 2017.
‘MUFG is proceeding with the optimisation of capital management in the face of tightened international financial regulations and changes in the business environment,’ the statement read.
‘In that context, MUFG is conducting a review of existing strategic investments by MUFG group companies from the viewpoint of strategy and capital efficiency.’
MUFG’s disposal comes months before Lloyds completes the switch of a £109 billion SWIP mandate from SLA to BlackRock and Schroders. On top of this, SLA has been suffering sharp outflows from its Global Absolute Return Strategies multi-asset portfolio, with outflows of £8.3 billion in 2018.
The volatility in the fourth quarter of 2018 suggests more pain is on the way for SLA after its investment engine, Aberdeen Standard Investments (ASI), suffered a £19 billion outflow in the first six months of the year.
This resulted in a 3% fall in assets under management to £557 billion at the end of June. Profits fell from £325 million to £317 million as a consequence of lower fee-based revenue. SLA is scheduled to publish its full-year results on 13 March.
SLA is also under pressure from investors to abandon its dual CEO structure, which is split between Keith Skeoch (pictured above, left) and Martin Gilbert (right).
Last November, a poll of 21 large investors conducted by Procensus, an opinion-sharing platform for institutional shareholders, found two-thirds wanted an external candidate to be drafted in to replace Skeoch and Gilbert this year.
Asian property buy
Meanwhile ASI has acquired Asian real estate investment manager Orion Partners.
The move bolsters ASI’s investment strength in Asia real estate and adds $900 million to its $56.3 billion global real estate franchise.
In a statement, ASI said the deal signals the firm's ambition to develop and distribute a wider range of Asia Pacific products to meet rising global demand for ‘new active’ investment solutions.
ASI head of Asia Pacific Hugh Young (pictured) said: ‘For investors seeking diversification, Asian real estate offers attractive risk-adjusted returns, with less correlation to broader market volatility.
‘Having established a track record across equities, fixed income, private equity and real estate multi-manager investing in Asia Pacific over the years, this is a good opportunity for us to build out our regional real estate presence.’