LISTENING to Keith Skeoch set out the logic behind Standard Life’s bumper merger with Aberdeen Asset Management yesterday, it was clear the veteran financier believes there is compelling logic to the tie-up.
Addressing analysts during Standard Life’s interim results presentation, he highlighted the “complementary nature”
of the two organisations, their shared investment philosophy, stating it would boost the enlarged group’s investment capability.
He also pointed out the potential for further innovation and synergies, although staff caught up in the 800 redundancies the deal is expected to bring may perhaps not be as enthusiastic about the £200m in annual savings the merger is forecast to bring.
The creation of Standard Life Aberdeen will face some challenges, though. As shown by Standard Life’s first half results, the investment giant continues to suffer outflows from its funds – a problem Aberdeen itself has faced in recent years as active fund managers have found the going tough against passive funds.
Achieving cost savings may help Standard Life Aberdeen in this regard in the fullness of time, but there are other, pressing issues for management to deal with too.
In the short term, Mr Skeoch and fellow chief executive Martin Gilbert face the challenge not only of running the merged business side by side, but in integrating two organisations with very distinctive cultures – the arguably more entrepreneurial Aberdeen and one-time mutual Standard Life – while keeping disruption for clients and staff to a minimum.
It will certainly be interesting to watch the story unfold.
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