Standard Life Aberdeen sells Parmenion for £102m
Stephen Bird: growing momentum
Standard Life Aberdeen has sold investment management subsidiary Parmenion Capital Partners to private equity group Preservation Capital Partners in a £102m deal.
Parmenion currently manages around £8bn of assets on behalf of more than 2,500 advisers and more than 68,000 underlying clients.
The deal was announced hours after chief executive Stephen Bird said the business was being simplified and refocused through disposals and a shift in its investment strategy.
The company’s “new strategy” will see it rebrand later in the year as Mr Bird seeks to return the business to revenue and earnings growth and a sustainable level of dividends. The board announced its first cut in the dividend since 2006.
Earlier, in a conference call with the media, Mr Bird said there will be a single brand and discussions over the proposal with colleagues had been favourable. The brand was sold to Phoenix in a deal aimed at boosting the trading relationship between them.
He confirmed that the company was continuing to assess its property needs in the light of the work-from-home trend and the desire for a hybrid operation.
“We will require a smaller office footprint,” he said. “I have not fully resolved what size that will be.”
He said offices were being re-configured but office needs would become clearer once staff were released from restrictions.
“Offices are essential as a locus of socialisation and brain storming.”
The company posted a fall in adjusted profit before tax to £487m (2019: £584m), largely reflecting lower revenue.
AUMA fell to £534.6bn (2019: £544.6bn) reflecting £25.9bn of Lloyds Banking Group withdrawals, partially offset by improvements in markets.
The board is cutting the proposed final dividend by a third to 7.3p per share, bringing the total dividend for the year to 14.6p per share. This compares to 21.6p in 2019 and is the first cut since flotation in 2006.
The company said the dividend will be maintained at this level until it is covered at least 1.5 times by adjusted capital generation after which it will grow again.
Shares in Standard Life Aberdeen were among the biggest fallers, down 22.9p to 296.1p.
In the statement, Mr Bird said: “We have seen growing momentum in the second half of 2020 with improved investment performance and flows which represent an inflection point as we pull out of the post-merger era.
“We remain on track to deliver targeted synergies and have identified more that we can deliver. “We have a clear vision; we will focus on the future to enable our clients to be better investors.
“We have three growth vectors – Investments, Adviser and Personal. Thanks to our strong capital position, we have strategic flexibility around how we grow these businesses and we have set out clear ambitions.
“At this reset point for this business, we have rebased to set firm foundations on which we can build something great. I’m excited about what’s to come.”