Abrdn will have “a lot of difficult decisions” to make following news of the departure of its chief executive Stephen Bird next month, Morningstar has warned.
Abrdn announced this morning that it is on the hunt for a new CEO.
Chief financial officer Jason Windsor has been made interim group CEO, subject to regulatory approval, while a formal search process is completed.
In a statement, Abrdn said that following the “significant strategic repositioning” of the company, the board and Bird have “together agreed” that it is the right time for him to “hand over the reins”.
Morningstar investment research analyst Michael Born said Bird’s departure is “perhaps unsurprising” given recent results.
“Performance woes have continued to follow many of the flagship strategies, leading to tumultuous years of outflows,” he said. “And we have seen some senior investment team members depart the business over recent years.
“While Bird oversaw a programme of concentrating on their core competencies, disposing of assets such as their US-based private equity business, and implemented a cost-cutting programme including job cuts over Q1, it hasn’t done enough to fix the core issue at heart.”
In January this year, Abrdn announced it would axe around 500 jobs as part of its plan to save £150m.
It said approximately 80% of the savings will be from the investment arm of the business.
The company added the cost-cutting measures are necessary to “restore our core investments business to an acceptable level of profitability”.
In February, the business reported a pre-tax loss of £6m in 2023, as falling revenue in its investment arm continued to bite.
In its full report for the year, the group reported an overall 4% drop in net revenues from £1,456m in 2022 to £1,398m in 2023.
At £249m (2022: £263m), adjusted operating profit was down 5% on the previous year.
Born warned that succession will be “key to whether [a new CEO] will be a positive development”.
“Seeing someone in the top job with prior experience of successful turnarounds and knowledge of key markets like the UK and Asia would make for good characteristics, but ultimately the proof will be in the pudding.”
“Can the new chief find the right plan? We have no doubts there are a lot of difficult decisions ahead.”
