- ABRDN’s share price (LON:ABDN) has rallied by +16.0% since its mid-January update, could things be improving at the hard-pressed fund manager?
- Fund manager Abrdn (ticker ABDN) formerly known as Aberdeen, has seen its share price fall by more than -38.0% over the last three years.
- However, things appear to be looking up in 2025, with the stock up by almost +16.0%, since the middle of January. When it traded at a low of 130.50p as I type, the shares are printing at 153.60p.
So what, if anything, is behind the turnaround?
Well, the answer to that lies in Abrdn’s policy of tough love which involved cost-cutting and headcount reductions, attempting to improve marketing and its fund’s performance. Which now seems to be bearing fruit.
Aberdeen shares enjoyed their best day in nearly 5-years on January 21st as it reported new net inflows of £1.20 billion.
The stock price rallied by +-9.60% on the news, the best one-day performance in the stock since April 2020.
Overall AUM at Abrdn rose by +3.0% in 2024 and in Q4 £500 million flowed into the firm’s funds driven by investors seeking access to quantitative strategies and liquid funds.
Interactive Investors, the D2C platform which Abrdn bought a few years back, has been performing well, with net inflows into the business of £5.7 billion in 2024 up from just 2.90 billion in 2023.
However, Abrdn’s costs still look comparatively (too) high to me.
Management said that it is on course to get them below its £1.075 billion target, with an annual cost savings run rate of £100.0 million.
If we look back to August last year and Abrdn’s half-year earnings, the firm made a pre-tax profit of just £187.0 million, and that includes an £88.0 million gain on the disposal of a private equity business.
Then, the business had a cost-income ratio of 81.0%, which effectively means its costs “ate up” 81p of every pound it earned. True, that was lower than the previous year, but it leaves little room for manoeuvre.
Shareholders will get a chance to run the slide rule over Abrdn’s performance when it reports full-year results on March 4th.
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