By Robert Outram, Editor of The CA
The Aberdeen Asset Management and Standard Life merger has been approved and is expected to complete on 14 August 2017.
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We caught up with Aberdeen Asset Management’s CEO and ICAS Conference Speaker, Martin Gilbert CA in the run-up to the merger.
Aberdeen Asset Management is on the brink of another big deal – a mutually agreed merger with financial services giant Standard Life. The combined business will be the biggest asset manager outside the US in terms of revenue and the second biggest in terms of assets under management.
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In this share-based merger, Aberdeen Asset Management is the smaller partner. But for Martin Gilbert CA, CEO of Aberdeen, the rationale behind the deal is clear: “To build a world-class investment company.”
He explains: “We are highly complementary businesses. In absolute return products, Standard Life is a world leader and I like to think that, in emerging markets, we’re strong. I think the combination is very powerful.”
In total, Aberdeen has £302.6bn in assets under management (as of 31 December 2016).
Standard Life employs 6,300 people worldwide, including 5,500 in the UK; Aberdeen has 2,800 employees, of whom 1,500 are in the UK.
A new form of leadership?
Martin and Standard Life’s Keith Skeoch have been appointed co-chief executives, under the chairmanship of Sir Gerry Grimstone, who is currently chairman at Standard Life. Martin said: “Keith and I are complementary in terms of our abilities and what we’re interested in doing.”
Martin Gilbert CA
He adds that co-chief executives are not that uncommon in the financial services sector. In a statement, Standard Life and Aberdeen said that Keith will have accountability for “the day-to-day running of the fabric of the combined business” and Martin will be accountable for “external matters, including international activities, distribution including client engagement and business development, marketing and corporate development.”
Martin explained that some Aberdeen staff are now working with the Standard Life management, and vice versa, to ensure that the two organisations do not start out with a “them and us” mentality. He hopes that the merger could go through as early as June this year. He said: “The key, really, is about building something that is relevant globally.”
The move, Martin said, positions the merged business as a strong brand that is all about solutions for clients, not just about specific investment products. Both brands are likely to be retained, with a holding company that incorporates both names: “Aberdeen Standard” is one option.
Evolving with technology
Fund management has changed a lot from what Martin describes as a “cottage industry” when Aberdeen was founded. He believes that technology will continue to change the industry, but he sees the key challenges coming from the established players that can adapt their business models, rather than new entrants disrupting the market.
He said: “We operate in a tightly regulated business… Many of the specialist ‘Internet banks’ failed because the established banks themselves became Internet banks. So we have to become ‘robo-advisers’ and platform businesses, and that’s what we are doing.”
ICAS Conference 2017
Martin will be speaking at The ICAS Conference 2017 in association with Investec Wealth & Investment. The conference brings together some of the most insightful leaders in business, politics and the media and brings you together with fellow professionals who are all trying to solve the same conundrum. This is a day which will arm you with what you need to know to successfully conquer the next 12 months in business.
