Pressure on Standard Life Aberdeen chiefs to quit intensifies as major investor dumps stock

Martin Gilbert has already suggested he may be considering his furture

Shares in the Edinburgh-based financial services provider fell by 14¾p, or 6 per cent, to 233¾p in reaction to the move by the Japanese banking group, Mitsubishi UFJ Trust and Banking Corporation, that saw it offload its entire holding in SLA for a discounted price.

MUFG’s move brought the financial group’s total share price fall in the past year to 44 per cent.

There is now a growing view among shareholders that Standard Life Aberdeen’s unusual structure of having co-chief executives — Keith Skeoch, 62, and Martin Gilbert, 63 — needs to change.

Last year, a poll carried out by market data firm Procensus already revealed a number of institutional investors wanted to see a new, solo chief executive at SLA.

Two thirds of 21 surveyed investors polled asked for SLA’s co-chief executives structure including Mr Skeoch and Mr Gilbert, to be scrapped.

Now, some investors are understood to have told chairman Sir Douglas Flint to ask Mr Skeoch and Mr Gilbert to step down and for the company to bring in fresh blood to increase the pace of change in the business.

The calls come after Mr Gilbert used his annual appearance at the World Economic Forum in Davos in January to reveal that his time at the forefront of Scotland’s investment scene could be coming to an end, 36 years after founding his company, Aberdeen Asset Management, which merged with Standard Life in March 2017, creating Britain’s biggest asset manager, bringing together £610 billion of assets with clients in 80 countries and offices in 46.

The deal between the stock-picking firms as they came under increasing pressure on income amid competition from passive funds that track indexes and charge clients very small fees.

The pair as separate entities also had been hit by billions of pounds of outflows from customers.

Unlike Mr Gilbert, Mr Skeoch, who was chief executive of Standard Life prior to the merger, has not hinted publicly that he may be minded to depart the scene.

It has been Mr Skeoch’s remit to improve the investment performance of the funds and to launch new ones.

Mr Gilbert, meanwhile, has had the responsibility of trying to harness the combined sales force to expand its international presence.

It has become increasingly obvious, however, that investors’ patience has worn thin and they are frustrated about the outflow of money from some of the company’s most important funds, including Global Absolute Return Strategies.

Some reports also suggest concerns that tribal loyalties within the company be hindering integration and progress with its post-merger strategy.

Mitsubishi UFJ Trust and Banking Corporation, part of MUFG, yesterday said that it had sold its 5.9 per cent stake in the business for £349.3 million. It had owned the stake since 2008, when it bought a slice of Aberdeen and struck a distribution deal.

Last year the Japanese institution bought an asset manager outright, Colonial First State Global Asset Management, from Commonwealth Bank of Australia, prompting it to decide that it did not also need a stake in Standard Life Aberdeen.

It said yesterday: “Although the Trust Bank has now decided to sell these shares after careful consideration based on changes in the business environment surrounding MUFG and the Trust Bank, Standard Life Aberdeen will continue to remain our important partner.”

The two continue to have a business arrangement in Japan, where MUFG will distribute Standard Life Aberdeen’s products to pension funds.

Full-year results from Standard Life Aberdeen on March 13.

They will be eagerly awaited by investors anxious to see how it is progressing with hitting its ambition of cutting £350 million of costs over a three-year span.

Standard Life Aberdeen declined to comment.