Abrdn is prepping to sell its private equity funds business as part of CEO Stephen Bird’s ongoing efforts to turn the asset manager’s fortunes around.
The FTSE 100 firm has already hired investment bankers to find a buyer for the £14bn division, according to Sky News, and Rothschild has been appointed to oversee the process.
Abrdn has declined to comment.
The sale, which insiders predict could take up to several months, would represent the latest major change under Bird (pictured), who has been attempting to streamline the businesss.
Since taking the reins of what was then called Standard Life Aberdeen in July 2020, the fund group has jettisoned several non-core businesses, including its adviser platform Parmenion, while acquiring companies to enhance its digital capabilities, such as Finimize and wealthtech platform Nucoro, which it acquired a stake in last month.
Its most significant deal by far was acquiring Interactive Investor for an eye watering £1.5bn.
But recently Abrdn has shown signs of shifting gears from its acquisitive strategy, with the group unveiling a £300m share buyback scheme earlier this month.
But the fund group’s share price is hovering near an all-time low of 157p, a 37% decline from the start of the year.
Though outflows from its funds narrowed substantially in 2021 to £6.2bn, they are expected to intensify amid the volatile market backdrop this year.
As a result, analysts at Goldman Sachs are predicting Abrdn will fail to meet its three-year revenue ambitions of a high single digit compound annual growth rate (CAGR) over 2020-2023.
In addition to the squeeze on profitability, it also expects inflationary pressures could disrupt margins in the near to medium term.
However, most of this has already been baked into the share price, they added.