UPDATE 2-Aberdeen inflows positive at start of 2011

Mon Mar 28, 2011 10:59am BST

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* Total AUM 176 bln stg at end-Feb, down 4 pct yr-on-yr

* Net inflows 200 million pounds in Jan-Feb 2011

* Rate of outflows in Oct-Feb slows vs pvs yr-on-yr

* Says organic growth outlook for 2011 AUM "positive"

(Adds details, comments, share price)

By Cecilia Valente

LONDON, March 28 (Reuters) - UK fund manager Aberdeen Asset Management (ADN.L) said sales of equity funds more than offset outflows from other asset classes in the first two months of 2011, as it halted price cuts on its emerging markets products.

At February 28, Aberdeen had total assets under management (AUM) of 176.2 billion pounds ($282.2 billion), down 4 percent on falling markets and negative currency effects from the same period a year earlier.

During the first two months of 2011, 1 billion pounds of new money had flowed into Aberdeen's equity funds, more than offsetting 800 million pounds of outflows from fixed income, alternative investments, property and money markets.

Chief Executive Martin Gilbert said the net inflows were encouraging and the "outlook for organic growth of assets under management remained favourable."

Aberdeen noted equity pooled funds generated "significantly higher revenue margins than the outflows." The company also expected to see further fixed-income inflows later this year.

Chief Financial Officer Bill Rattray said Aberdeen would stop its discount policy on emerging-market equity fees as the asset class attracted 459 million pounds in the two months to end-February, plus 600 million pounds in unfunded mandates.

Aberdeen said it had won a further 2.7 billion pounds of business -- 1.5 billion pounds of which is in equity mandates, but these mandates had not been funded by end-February.

Aberdeen also said the rate at which investors took money elsewhere had slowed since a year earlier. In the five months to end-February, investors had withdrawn 600 million pounds, from 3.6 billion pounds a year ago. [ID:nLDE62M1W8]

The money market business, however, saw a 100 million pounds positive market performance.

0954 GMT, Aberdeen shares were up 1.7 percent up at 211.9 pence, outperforming a 0.2 percent increase in the FTSE 250 index .FTMC.

JP Morgan Cazenove retained its "overweight" rating on the stock, noting fixed-income outflows were below its 700 million pounds forecast, while inflows to equity was greater than its 600 million pounds estimate.

Evo Securities said "a further improvement in what has been a long running drag on its funds under management flows, leaving Aberdeen well positioned for the second half." It rated Aberdeen shares as "Add". (Additional reporting by Chris Vellacott; Editing by Andrew Macdonald) ($1=.6243 Pound)

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