Aberdeen CEO ‘sanguine’ on Brexit challenge

A history of being domiciled in Luxembourg makes managers well placed to deal with Brexit-related challenges. 

Martin Gilbert, chief executive of Aberdeen Asset Management, has said that he’s “sanguine” about the ability of large asset managers to meet the challenge of Brexit.

Speaking last week on a panel at City Week, a conference at London’s Guildhall run by the International Financial Services Forum, he said that Aberdeen has long been selling its fund business out of Luxembourg into Europe, not out of the UK, so has the infrastructure in place if it needs it.

“That came about because the tax structures in Luxembourg and Dublin were more beneficial for investors until the changes in the UK about four or five years ago,” he said, referring to the government’s 2013 UK Investment Management Strategy, which put in place a five-year strategy to make the UK a more attractive place to set up a fund through measures such as scrapping the 50-basis-point stamp duty levied on the redemption of units from UK-domiciled funds.

“The infrastructure is there, the management companies are there, the marketing is there, the risk [team] is already there.”

He emphasised the importance of scale, however, suggesting that smaller players might not find it so easy.

“We already operate in 50 countries so I think we can adapt. But I think it points to the need to be bigger in asset management to be able to afford these regulatory changes and the headwinds we are seeing across the industry.”

Formed in 1983, Aberdeen Asset Management had £308.1 billion ($396 billion and €354 billion) under management as of the end of March 2017. In early May asset manager Standard Life agreed terms to acquire Aberdeen for around £3.8 billion, with the two chiefs, Keith Skeoch and Martin Gilbert, set to be joint CEOs. The combined group will have £28 billion in private equity assets, according to PEI data.

Aberdeen is currently active in a range of alternative investment strategies including buyout, venture capital, secondaries, fund of funds, and mezzanine and distressed debt.