Stephen Bird: repositioning the company

Abrdn chief executive Stephen Bird has defended the company’s performance and insisted it has delivered for shareholders under his tenure.

Responding to a slump in profits last year and a sluggish share price, he told the asset manager’s AGM that the company was being repositioned to higher margin markets after a tough year for investments.

The stock is down 52% over the past five years and by more than 3% in the past week, although analysts note that inclusion of the dividend means the company has rewarded shareholders with a total shareholder return of 18% in the last twelve months. 

Mr Bird told one shareholder that the share price was about 230p when he joined in October 2020 and it is now about 205p. “If you take account of dividends each year then you are up,” he said.

He said the company was working to create a stronger business built around investments, personal and advisory and each was at a different stage.

In his opening remarks he said the decline in the investments business was because “2022 was one of the hardest investing years in living memory”.

He admitted that 2023 has “already brought further market disruption”, a reference to the banking issues in the US and he said high interest rates were seeing further moves into fixed income products.

He was encouraged by an improving situation in China and said the that “when the cycle turns we will have a stronger business” that will reap the returns.

Outside the Assembly Rooms in Edinburgh a protest was held to point out that the company was investing in companies engaged in coal, oil and gas extraction. The campaigners said Abrdn holds $65bn of bonds issued by Adani Group, the world’s biggest coal operator.

Chairman Sir Douglas Flint defended the company’s actions in relation to supporting fossil fuel companies, pointing that it had to take into account the mandates of clients.

He responded to a request for the AGM to alternative between London and Edinburgh by saying Abrdn was a Scottish company “and it is a great deal cheaper to have it in Edinburgh”.

He said the AGMs would continue to be hybrid and that meant that shareholders would always have access wherever it was held.

Speaking afterwards to the media said a debt default by the United States “is almost unthinkable” and would be a “cataclysmic” event for global markets.

Talks are taking place aimed at breaking the deadlock over raising the massive $31.4 trillion US debt limit amid a warning by US Treasury Secretary Janet Yellen that the Treasury could run out of cash by 1 June.

“It is almost unthinkable. A US default would be cataclysmic,” said Sir Douglas.

“Giving Congress the ability to hold the administration to ransom every time you come up against the ceiling is not a good form of government.

”But increasing debt all the time just because you need to borrow more is not good either.”

On the question of more mergers among big fund managers, he said: “We have done a big merger…before my time. I think we learned a lot from that [and] I’m not sure you would rush to do it again. The future is more in getting close to the consumer.”

On the question of extending the state retirement age to 68, he said: “I think it is inevitable”.