Asset manager Abrn announces £300m share buyback program

Abrdn shares top risers in FTSE 100 as it unveils £300m buyout program following Interactive Investor takeover

  • Abrn has appointed Goldman Sachs to lead the first phase of the program
  • Shares of the Edinburgh-based company had climbed 8.1% to 161.1p this morning
  • Interactive Investor’s £1.5 billion takeover by Abrn was completed in late May

Scottish investment group Abrn has announced it is undertaking a £300m share buyback programme.

The active asset manager has appointed Goldman Sachs to buy back shares worth up to £150m on its behalf under the first phase of the program, which is expected to roll out by the end of December.

Formerly known as Standard Life Aberdeen, the Edinburgh-based company told investors in a business update that the purpose of the takeover was to return excess capital to shareholders.

Takeover: The Edinburgh-based company told investors in a business update that the purpose of the takeover was to return excess capital to shareholders.

Foreign stocks jumped 8.1% to 161.1p in early trading on Wednesday, making it the first rise for the FTSE 100 index, although its value has still fallen by around a third in the past six months.

Analysts at multinational bank Citi last week downgraded the company’s shares from ‘neutral’ to ‘sell’ amid fears the company will miss its revenue targets due to poor market conditions. .

Abrdn, which recently purchased Interactive Investor, currently predicts compound annual revenue growth in the “high numbers” between 2020 and 2023, a view recently confirmed in its annual results release in March.

The results showed the company’s first annual increase in revenue since the merger between Standard Life and Aberdeen Asset Management five years ago.

Fee-based revenue increased 6% to £1.52 billion on the back of much lower net outflows, a significant increase in performance fee revenue and healthy expansion in Asia and the Americas.

Pre-tax profits also rose by a third to £1.12 billion, which the company attributed to the sale of stakes in the employer’s life insurance and asset management businesses. Indian Financial Services HDFC.

Chief executive Stephen Bird said Abrn had made “tremendous progress” during the year thanks, among other factors, to improving its relationship with its biggest customer, the Phoenix Group, to the sale of non-essential assets and the purchase of II.

At the end of May, the FTSE 100 group completed the purchase of II, Britain’s second largest investment platform, in a deal worth nearly £1.5bn, thus gaining approximately £59 billion in assets under administration and over 400,000 additional customers.

Many of these clients started investing during the Covid-19 pandemic, with a significant proportion of them being either women or young adults.

Abrn expects the purchase of Interactive Investor to deliver double-digit growth in adjusted earnings in the first full year following closing.

Stephen Bird said the acquisition “marks an important step in implementing our client-focused growth strategy”, adding that “ii’s high-tech direct investment service is the perfect complement to the capabilities wealth management and financial planning that we already offer”. .

“As a leading player in a rapidly growing market, with a scalable technology platform and a distinctive subscription model, the acquisition of ii will also allow us to diversify and grow our revenues.”