SLI hit by wholesale outflows of £400m in “challenging environment”

The firm cited “a challenging environment” for mutual funds as it reported gross redemptions in the wholesale business were £6.9 billion almost doubling from £3.6 billion outflows in the same period last year.

In particular, the multi-asset business saw the highest gross redemptions at £5.9 billion compared to £3.3 billion year on year.

However, institutional sales helped the business grow overall assets under management and overall AUM in the division increased by 6 per cent to £269 billion, helped by net inflows across wholesale and institutional channels of £1.6 billion.

Overall, SLI saw the highest gross redemptions from its multi-asset business (including the flagship GARS, which the firm said had a “relatively quiet period”) of £5.9 billion of AUM, while equities and fixed income also suffered.

However, the firm’s funds saw net institutional inflows of £2 billion, or 6 per cent of opening AUM, taking assets in this area up to £78.1 billion.

The firm also said net outflows from the Ignis business acquired in 2014 have improved to just £100 million, while net sales in the Standard Life Wealth arm increased to £200 million.

Meanwhile, assets at its adviser Wrap platform have jumped 20 per cent year-on-year to £28 billion, helped by £2.1 billion of net inflows in the first half.

Operating profit before tax for SLI jumped 14 per cent compared to the first half last year, to £176 million, benefiting from an 11 per cent increase in third party revenue.

Standard Life chief executive Keith Skeoch said: “Standard Life continues to make good progress towards building a world-class investment company, against a backdrop of volatile investment markets, by growing assets, profits, cash flows and returns to shareholders.

“Despite elevated uncertainty we are benefiting from our strong long-term relationships with a broad range of clients and customers who reacted in different ways to the changing market environment.”

Elsewhere, Standard Life UK Pensions and Savings saw profits before tax growing 7 per cent to £151 million in the first half of 2016 from £141 million a year ago.

The group said assets under administration in the division grew by 6 per cent to £139.2 million from £131.6 million in the same period in 2015.

Net inflows in the wrap platform also increased to £2.1 billion with assets under administration up 20 per cent to £28 billion year on year.

Overall, assets under administration for the group were up 7 per cent to £328 billion from £307.4 million for the whole 2015, helped by gross inflows of £20.6 billion and net inflows of £4.1 billion.

Standard Life chief executive UK & Europe Paul Matthews said: “Our UK Pensions and Savings business continues to deliver for customers through our leading savings and investment solutions.

“Wrap, our market-leading adviser platform, celebrates its tenth anniversary this year and continues to see strong demand from financial advisers with assets now £28 billion. Our agreement to acquire the Elevate platform will further strengthen our position in the adviser market.”

Meanwhile, Standard Life’s Indian insurance unit has moved to strength its position in the country’s fast-growing life-insurance market through a merger with local firm Maxi Life.

The move by the HDFC Standard Life business, in which the savings and insurance giant holds a 35 per cent stake reflects SL’s confidence in the potential of the market in the Subcontinent.

Mr Skeoch said he was delighted with the announcement of the proposed deal, noting: “We expect it to cement HDFC Life’s position as the leading private-sector Indian life insurance business.

“As a result of this transaction, we will have strategic stakes in leading Indian life-insurance and asset-management companies.”