April 1, 2014 / 10:12 AM / 3 years ago

Aberdeen Asset Management to cut costs after money leaves funds

LONDON (Reuters) - Aberdeen Asset Management said it planned to cut costs after weakness in emerging markets drove more money out of its funds in the first two months of the year, lifting its shares.

Outflows were 3.9 billion pounds, largely from its Asian and emerging market equity funds, Aberdeen said on Tuesday.

Money leaving its funds slowed in March and outflows for that month were expected to be around 200 million pounds, the fund manager said.

It remained cautious on the global market outlook and investor sentiment.

Shares in Aberdeen rose 5.6 percent after the statement and led gainers in the blue-chip FTSE 100 .FTSE in heavy volume, which was 80 percent of its three-month daily average after just over an hour of trade.

Numis analyst David McCann said the cost savings "should help cushion earnings from current revenue pressures", although he retained a "hold" recommendation on the stock, largely on valuation grounds.

In the first two months of the year Aberdeen said it secured 4 billion pounds in gross new business and had a strong pipeline. Total assets under management at end-February were 186.5 billion pounds.

"Conditions in emerging markets remain subdued, and we have therefore identified and are implementing some cost savings, over and above the synergies we expect from the SWIP transaction," Aberdeen Chief Executive Martin Gilbert said in a statement, referring to its purchase of the fund arm of Lloyds Banking Group, which completed on Tuesday.

Reporting by Simon Jessop; Editing by Erica Billingham

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