By Iain Withers
LONDON (Reuters) -Britain’s abrdn is selling its Focus Solutions software business as the asset manager’s new CEO Jason Windsor looks to show he can deliver changes fast to improve its performance.
Abrdn has agreed to sell the 100-person company, which it bought for 42 million pounds ($54 million) in 2011, to its management team led by Managing Director Dave Upton, a source familiar with the matter told Reuters.
While the disposal represents a fraction of abrdn’s total workforce of nearly 5,000 as of last year, the move is an early signal of intent from Windsor that he intends to cut costs.
Shares in abrdn – which has a market capitalisation of around 2.5 billion pounds – were down 1.5% in early trading on Tuesday, while the wider FTSE 250 mid-cap index of stocks was down 0.8%.
An abrdn spokesperson confirmed the plans for the Focus Solutions business, whose software supports the work of financial advisers, but declined to disclose the price.
Like other mid-sized asset managers, abrdn has been struggling with deep outflows of client funds in recent years as more investors shift into cheaper index-tracking products sold by U.S. giants such as BlackRock.
Former finance chief Windsor, who took on the CEO role earlier this year, has begun running the rule over the company’s various businesses with a view to cutting non-performing parts and refocusing on core areas, the source said.
Abrdn has been steadily writing down the value of Focus Solutions over time, with a final writedown of around single-digit millions expected in full-year results, although this is yet to be finalised, the source said.
The spokesperson said abrdn was focused on its three core businesses – investments, adviser and interactive investor.
“There will be parts of the group that do not feature in our future plans, and where we have an opportunity to simplify and become more efficient,” the spokesperson said.
“We concluded that Focus Solutions had reached an inflection point where abrdn was no longer the right owner,” they added.
($1 = 0.7774 pounds)
(Reporting by Iain Withers; Editing by Alexander Smith and Sharon Singleton)
