Abrdn chief reportedly wanted to sell struggling £368bn investment arm

Abrdn’s chief executive, Stephen Bird, wanted to sell the company’s troubled investment management division last June, it has been reported.

Bird pitched the sale to the asset manager’s board after it finished acquiring Interactive Investor, but the board vetoed his proposal, according to Financial News.

He had “a personal preference” for offloading the £368bn investment arm during a strategic review, Financial News reported, citing unnamed people familiar with the matter.

Sources said the board favoured continuing with an existing plan to turn around the division, believing that Abrdn “was fundamentally an asset management business”.

Executives who did support a sale reportedly argued that investors and analysts would welcome the news, with the investment business being ascribed little value by the stock market.

Abrdn’s share price is down more than eight per cent this year.

The group saw net outflows of £4.4bn in the first six months of 2023, with operating profit from the investment arm falling two-thirds to £26m.

Presenting the half-year results in August, Bird said the group was on track to deliver £75m in cost cuts from the investment business this year.

Bloomberg reported on Monday that Abrdn has hired Boston Consulting Group to help cut a further £200m in costs across the group.

Bird has staunchly backed retaining the business since last year’s decision, arguing that it gives the group more earnings stability across the economic cycle. 

An Abrdn spokesperson told City A.M.: “Strategy is about asking questions and testing alternatives. We do that in every strategy session. We have an agreed strategic direction that we are executing against at pace.

“Investment management is the core of our business, and we are making it more efficient and more relevant to our clients.”