The Lemon Fool

The last year has been a tumultuous time for a number of FTSE 100 shares. It has been especially challenging for Standard Life Aberdeen (LSE: SLA), with the asset manager’s share price dropping by over 40% during that time.

This, then, could be a good time to buy it for the long term. It trades on a low valuation, has a high yield and could benefit from various changes it is making to its structure. In contrast, another FTSE 350 share that released results on Thursday could be worth avoiding due to its high valuation and modest growth prospects.

Dod101 wrote:I hold Schroders and certainly prefer them. Their SP is down less than 20% even after the 4.5% fall today on the back of their none too rosy results. Their dividend is also secure.

The only positive I see with SLA is the new chairman Douglas Flint, ex chairman of HSBC.

Dod

FTSE 100 asset manager Standard Life Aberdeen (LSE: SLA) has been a disappointing investment over the last couple of years.

Since Standard Life merged with Aberdeen Asset Management in 2017, shares in the combined firm have lost about 50% of their value. A generous dividend is some compensation, but how safe is this payout?

I’ve been taking a look at the firm’s latest results to find out more.

“Building blocks in place”

The company says that it’s now 75% of the way through its transformation plan, leaving it ahead of schedule. Chief executive Keith Skeoch believes that a growing focus on direct relationships with retail customers and new areas of active investment like real estate and private equity will produce long-term results.

However, the firm’s performance does not yet show any signs of improvement. Outflows from the group’s funds increased in 2018. Assets under administration fell from £608.1bn to £551.5bn during the year.

Pre-tax profit from continuing operations fell from £660m to £650m. As a result, the 21.6p dividend was not covered by adjusted earnings from continuing operations of 17.8p per share.

TMF (idpickering) wrote: Chief executive Keith Skeoch believes that a growing focus on direct relationships with retail customers and new areas of active investment like real estate and private equity will produce long-term results.

The merger of Standard Life and Aberdeen Asset Management was all about scale. Scale creates opportunities for cost savings, offsetting the pressure on fees from regulatory scrutiny and passive investment funds that have impacted margins across the wider industry.

Early signs aren't bad. Cost savings are running ahead of plan and a diversified distribution network also seems to be bearing fruit, with the financial adviser platforms performing well despite tough conditions in the institutional market.

That hasn't been enough to stop the money walking out the door though. The group lost 6.7% of total AUM to withdrawals in 2018, and recent market falls have compounded the pain.

Investors in Standard Life Aberdeen (LSE: SLA) have had a torrid time of it over the past 12 months.

Including dividends, since mid-March 2018, the stock has lost 34.6%, underperforming the FTSE 100 by 38.8%. Over the past five years, the company’s performance isn’t much better.

Investors who bought the Standard Life share price in March 2014 have seen the value of their investment lag the FTSE 100 by 8.5% per annum including dividends.

Based on these numbers, I calculate that every £1,000 invested in the FTSE 100 five years ago is worth 50% more today than a similar investment in Standard Life.

After these declines, the company’s dividend yield has spiked to 9.2%, giving it the third highest dividend yield in the FTSE 100. The question is whether it is worth making the most of this opportunity and pouncing on Standard Life today, or should you stay away?

It’s fair to say that the merger between Standard Life and Aberdeen in 2017 to form FTSE 100 giant Standard Life Aberdeen (LSE: SLA) has fallen short of expectations.

Below Standard

Hopes of creating an all-conquering fund management behemoth suffered a setback when Lloyds Banking Group and Scottish Widows ended its £109bn asset management contract, claiming the new combined entity was a competitor to its investment division. This was a blow, even though it represented less than 5% of the group’s 2017 revenues.

Lloyds planned to shift £80bn to Schroders and £30bn to BlackRock, but on Tuesday a tribunal ruled against Lloyds, which may now have to hand over cash for breaking its deal early, or even leave funds with Standard Life until 2022. This may be low-margin business but the news rounds off a good few weeks for the group, which is up almost 13% over the last month. Its stock is still down a third over the past year, though.

Shareholders have endured a rocky ride since Standard Life merged with Aberdeen Asset Management during 2017 to form Standard Life Aberdeen (LSE: SLA). Hard on the heels of that move, the enlarged firm sold off its insurance business to Phoenix Group in a deal that left SLA with a stake of around 20% in Phoenix.

The old Standard Life shareholders who once owned shares in an insurance company with an asset management division attached now essentially hold the stock of an asset management business similar to the old Aberdeen Asset Management but bigger. They’ve also seen the shares they’re holding plunge around 45% since 2015, and I reckon a big factor in that move has been the uncertainty of it all.

LONDON (Reuters) - Veteran fund manager Martin Gilbert is to step down from the board of British fund firm Standard Life Aberdeen <SLA.L> to take up a role as the chairman of digital bank Revolut, the Financial Times reported on Tuesday, citing sources.

His departure from the group, the product of an 11 billion pound merger between Standard Life Investments and Aberdeen Asset Management in 2017, could be announced as early as Wednesday, the FT said.

Standard Life Aberdeen plc ("the Company") is pleased to announce that it has agreed a final settlement with Lloyds Banking Group / Scottish Widows ("LBG") in relation to the arbitration proceedings between the parties concerning LBG's attempt to terminate investment management arrangements under which assets are managed by members of the Standard Life Aberdeen group ("SLA Group") for LBG entities.

In its decision of March 2019, the arbitral tribunal found that LBG was not entitled to terminate these investment management arrangements. The SLA Group has continued to manage approximately £104bn (as at 30 June 2019) of assets under management ("AUM") for LBG entities during the period of the dispute.