Aberdeen Asset Management suffered net outflows of £4.8bn in the final quarter of last year because of weakening investor appetite for emerging market funds, sending its shares down sharply on Tuesday.
Europe’s biggest independent investor said its assets under management contracted to £323.3bn at the end of December compared with £324.4bn at the end of September.
Aberdeen is heavily exposed to emerging markets, which have underperformed because of concerns that interest rates will rise in the US and a lower oil price and strengthening dollar would destabilise these economies.
The FTSE 100 group is also losing market share among retail investors because of a broad global shift towards index trackers and other passive funds at the expense of active managers, such as Aberdeen.
Martin Gilbert, chief executive, insisted: “We can turn things round, but it does depend on the emerging markets coming back in favour. We are suffering because of the global macro picture, which has hurt emerging markets.
“We have taken a long-term view in emerging markets that they are a good area to invest in. It might not be this year. It might not be in five years' time. But we are confident that they will come back.”
Mr Gilbert’s confidence is partly based on his view that the group’s acquisition of Scottish Widows Investment Partnership will help the company diversify its asset base geographically and into other products.
Before the acquisition, Aberdeen had been far too concentrated on its blockbuster products of emerging market equities, Asia-Pacific equities and global equity funds. Equity accounted for 75 per cent of revenues.
Since the completion of the SWIP deal in March last year, the group has a much stronger presence in fixed income, property and so-called investment solutions, particularly in the UK market. Equity accounts for 60 per cent of revenues.
However, the group still has a large part of its business in emerging markets, rather than the US and Europe, where equity markets are performing more strongly.
By mid-afternoon in London, shares were down 3.45 per cent at 424.90p.
Peter Lenardos, strategist at RBC Capital Markets, said: “Investment performance is weak, but that is to be expected from a group that is overweight emerging markets and underweight Europe and US. No one should have been surprised by these results.”
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