The Lemon Fool

ADrunkenMarcus wrote:I don't like the name abrdn or the phrase 'growth vectors'.

Best wishes


Mark.

One reason I sold. Really had no confidence in the judgement of the BoDs

They have managed to lose less AUM than in previous years, thanks in part to an increase in the market prices but the culture does not seem very attractive to me and I am glad that I do no hold them. Schroders is far better in the sector.

Dod

Dod101 wrote:They have managed to lose less AUM than in previous years, thanks in part to an increase in the market prices but the culture does not seem very attractive to me and I am glad that I do no hold them. Schroders is far better in the sector.
Dod

Some comments:
comment in red above - things are improving then!
The trend in revenues is the first point. We see a general increase over the years with Schroders. The history of ABDN and the ensuing sharp drop off in revenue is marked.
Schroders margins are robust/attractive. No such data available from the MS website on ABDN so no comment
Schroders - dividend has increased and has been maintained. ABDN cut their dividend significantly (although not shown here it went from 21.6p to 14.6p per share recently).
Schroders - number of shares has been stable. ABDN has seen significant dilution.
Free cash flow per share / dividend ("B/A") - With ABDN, there has been quite a few years when the dividend has not been covered by the free cash flow (negative number)....yet the dividend was maintained.
One of the companies probably paid a daft sum of money in rebranding, leading to derision (however, ABDN's rebranding has worked as my wife, who has zero interest in investing but has some "free" ABDN shares, takes the Michael out of the new name - so she is "brand aware" in market speak!).

Plans for the future ? ABDN seems to be in consolidation mode having sold off big chunks of itself. Will/Has Schroders move into the lucrative Asian markets (mainly China) (This was on the table 6(?)months ago but I've lost track).

All data taken from MorningStar website ..
https://financials.morningstar.com/rati ... =xlon:abdn

Nick Train is famously bullish on asset managers. I don't think he holds abrdn!

Best wishes


Mark.

Dod101 wrote:They have managed to lose less AUM than in previous years, thanks in part to an increase in the market prices but the culture does not seem very attractive to me and I am glad that I do no hold them. Schroders is far better in the sector.

Dod

I am seriously considering disposing of my entire stake in ABDN and splitting the proceeds between LGEN and SRDC, both of which are existing holdings, which will also have the beneficial effect of increasing the dividend income received.

Ian

ian56 wrote:
I am seriously considering disposing of my entire stake in ABDN and splitting the proceeds between LGEN and SRDC, both of which are existing holdings, which will also have the beneficial effect of increasing the dividend income received.

Ian

Sounds like a decent plan. I’m often in favour of greater concentration.

Best wishes


Mark

ian56 wrote:
I am seriously considering disposing of my entire stake in ABDN and splitting the proceeds between LGEN and SRDC, both of which are existing holdings, which will also have the beneficial effect of increasing the dividend income received.

Ian

Be mindful of the ex dividend dates ( without wishing to get into the old chestnut debate of buying ex or cum dividend...that's buyer's choice!).

https://www.dividenddata.co.uk/exdivide ... sc=xd&st=0

ADrunkenMarcus wrote:

ian56 wrote:
I am seriously considering disposing of my entire stake in ABDN and splitting the proceeds between LGEN and SRDC, both of which are existing holdings, which will also have the beneficial effect of increasing the dividend income received.

Ian

Sounds like a decent plan. I’m often in favour of greater concentration.

Best wishes


Mark

I have held both L & G and Schroders for a long time and have never held abrdn. I was always very sceptical of Martin Gilbert, a wheeler and dealer, and that sort of culture is very difficult to shed. Schroder has stability because of the large family shareholding I think. LGEN has been a relatively low profile insurer and now much more for at least the last 50 years, after I started taking an interest in such matters.

Dod

Thanks to monabri for his comprehensive report. As for Asia/China, the Annual Report says that 18% of funds under management were from Asia and that they had been granted permission to establish a fund management company in China itself. No further word that I could find in the half year report.

Dod

monabri wrote:

ian56 wrote:
I am seriously considering disposing of my entire stake in ABDN and splitting the proceeds between LGEN and SRDC, both of which are existing holdings, which will also have the beneficial effect of increasing the dividend income received.

Ian

Be mindful of the ex dividend dates ( without wishing to get into the old chestnut debate of buying ex or cum dividend...that's buyer's choice!)
https://www.dividenddata.co.uk/exdivide ... sc=xd&st=0

Yes, thank you, I have been eyeing those up as well.

Ian

ADrunkenMarcus wrote:Nick Train is famously bullish on asset managers. I don't think he holds abrdn!

Best wishes


Mark.

He does hold a lot of Hargreaves Lansdown, I think. One can understand his liking for the sector in view of how much he must have mad out of Lindsell Train.

I have long thought the net profit margins in that business cannot be sustained long term. HL makes about 50% net profit! It is not a business where there are moats or barriers to entry and if the likes of Vanguard decided to get into it they could do it at scale far cheaper than HL.

scrumpyjack wrote:

ADrunkenMarcus wrote:Nick Train is famously bullish on asset managers. I don't think he holds abrdn!

Best wishes


Mark.

He does hold a lot of Hargreaves Lansdown, I think. One can understand his liking for the sector in view of how much he must have mad out of Lindsell Train.

I have long thought the net profit margins in that business cannot be sustained long term. HL makes about 50% net profit! It is not a business where there are moats or barriers to entry and if the likes of Vanguard decided to get into it they could do it at scale far cheaper than HL.

We cannot compare HL's business with that of Schroders and certainly not of Legal & General's nor Lindsell Train's for that matter. HL is not an asset manager like any of them. Many here seem to use HL irrespective of their ridiculous charging structure and that is why they are so profitable. They also have a relatively straightforward business model.

Dod

Dod101 wrote:

scrumpyjack wrote:He does hold a lot of Hargreaves Lansdown, I think. One can understand his liking for the sector in view of how much he must have mad out of Lindsell Train.

I have long thought the net profit margins in that business cannot be sustained long term. HL makes about 50% net profit! It is not a business where there are moats or barriers to entry and if the likes of Vanguard decided to get into it they could do it at scale far cheaper than HL.

We cannot compare HL's business with that of Schroders and certainly not of Legal & General's nor Lindsell Train's for that matter. HL is not an asset manager like any of them. Many here seem to use HL irrespective of their ridiculous charging structure and that is why they are so profitable. They also have a relatively straightforward business model.

HL *are* an asset manager insofar as they have their own funds and funds of funds. I appreciate that their main business line is their self-directed investment platform, so they are a different beast in that sense.

Their fees are not bad if you don't hold OEICs/unit trusts. No account charges for their unwrapped Fund and Share account and ISAs have a 0.45% charge but which is capped. If you have a large ISA account with investment trusts and shares only they work out well.

Best wishes


Mark.

Dod101 wrote:

scrumpyjack wrote:

ADrunkenMarcus wrote:Nick Train is famously bullish on asset managers. I don't think he holds abrdn!

Best wishes


Mark.

He does hold a lot of Hargreaves Lansdown, I think. One can understand his liking for the sector in view of how much he must have mad out of Lindsell Train.

I have long thought the net profit margins in that business cannot be sustained long term. HL makes about 50% net profit! It is not a business where there are moats or barriers to entry and if the likes of Vanguard decided to get into it they could do it at scale far cheaper than HL.

We cannot compare HL's business with that of Schroders and certainly not of Legal & General's nor Lindsell Train's for that matter. HL is not an asset manager like any of them. Many here seem to use HL irrespective of their ridiculous charging structure and that is why they are so profitable. They also have a relatively straightforward business model.

Dod

Quite so, but HL are so profitable because there is little competition and those that there are (AJ Bell) don't really try to compete on price. LT have long been very keen on HL. I don't know if they hold any asset managers, as opposed to platforms, apart from Lindsell Train itself.

LT are of course keen on Hargreaves Lansdown because of that profit margin, no doubt, not because of any great love of asset managers. In any case I think we agree that the primary business of HL is not an asset manager but a platform. A competitor is of course II and much better value the last time I checked.

Anyway this is a thread on abrdn which is an asset manager not a platform and one I have never held. Much prefer Schroders and we can look at the numbers that monabri kindly provided to tell why.

Dod

Result of Secondary Placing

abrdn announces that it has sold an aggregate of 39,981,442 ordinary shares (the "Placing Shares") of its shareholding in Phoenix Group Holdings plc ("Phoenix"), representing approximately 4% of Phoenix's issued share capital, to institutional investors, at a price of 660 pence per share (the "Placing"), raising aggregate gross sale proceeds of approximately £264 million.

Following settlement of the Placing, which is expected to take place on 1 February 2022, abrdn's holding will represent approximately 10.4% of Phoenix's issued share capital and abrdn will continue to appoint a director to Phoenix's Board.

abrdn intends to return the net proceeds of the Placing to shareholders, with the method and timing of the return to be announced as soon as practicable after the Company's results on 1 March.

https://www.investegate.co.uk/abrdn-plc ... 00089143Z/

idpickering wrote:Result of Secondary Placing

abrdn announces that it has sold an aggregate of 39,981,442 ordinary shares (the "Placing Shares") of its shareholding in Phoenix Group Holdings plc ("Phoenix"), representing approximately 4% of Phoenix's issued share capital, to institutional investors, at a price of 660 pence per share (the "Placing"), raising aggregate gross sale proceeds of approximately £264 million.

Following settlement of the Placing, which is expected to take place on 1 February 2022, abrdn's holding will represent approximately 10.4% of Phoenix's issued share capital and abrdn will continue to appoint a director to Phoenix's Board.

abrdn intends to return the net proceeds of the Placing to shareholders, with the method and timing of the return to be announced as soon as practicable after the Company's results on 1 March.

https://www.investegate.co.uk/abrdn-plc ... 00089143Z/

So £264mio that was invested in a business with a P/E of about 7 (an earnings yield of about 13%), or that had a dividend yield of 7% has been sold and now is in "cash" earning nothing. Let's hope they do something with it soon else that will look earnings dilutive. I assume the Directors already have a plan before pulling their trigger.

I guess they could do worse than buy shares in a similar company with a P/E even lower, 6 say. Looking at the market ABDN might fit the bill.

dealtn wrote:

idpickering wrote:Result of Secondary Placing

abrdn announces that it has sold an aggregate of 39,981,442 ordinary shares (the "Placing Shares") of its shareholding in Phoenix Group Holdings plc ("Phoenix"), representing approximately 4% of Phoenix's issued share capital, to institutional investors, at a price of 660 pence per share (the "Placing"), raising aggregate gross sale proceeds of approximately £264 million.

Following settlement of the Placing, which is expected to take place on 1 February 2022, abrdn's holding will represent approximately 10.4% of Phoenix's issued share capital and abrdn will continue to appoint a director to Phoenix's Board.

abrdn intends to return the net proceeds of the Placing to shareholders, with the method and timing of the return to be announced as soon as practicable after the Company's results on 1 March.

https://www.investegate.co.uk/abrdn-plc ... 00089143Z/

So £264mio that was invested in a business with a P/E of about 7 (an earnings yield of about 13%), or that had a dividend yield of 7% has been sold and now is in "cash" earning nothing. Let's hope they do something with it soon else that will look earnings dilutive. I assume the Directors already have a plan before pulling their trigger.

I guess they could do worse than buy shares in a similar company with a P/E even lower, 6 say. Looking at the market ABDN might fit the bill.

Have I got this wrong? It reads to me that they are going to return the proceeds to shareholders.

Dod

Dod101 wrote:

dealtn wrote:

idpickering wrote:Result of Secondary Placing

abrdn announces that it has sold an aggregate of 39,981,442 ordinary shares (the "Placing Shares") of its shareholding in Phoenix Group Holdings plc ("Phoenix"), representing approximately 4% of Phoenix's issued share capital, to institutional investors, at a price of 660 pence per share (the "Placing"), raising aggregate gross sale proceeds of approximately £264 million.

Following settlement of the Placing, which is expected to take place on 1 February 2022, abrdn's holding will represent approximately 10.4% of Phoenix's issued share capital and abrdn will continue to appoint a director to Phoenix's Board.

abrdn intends to return the net proceeds of the Placing to shareholders, with the method and timing of the return to be announced as soon as practicable after the Company's results on 1 March.

https://www.investegate.co.uk/abrdn-plc ... 00089143Z/

So £264mio that was invested in a business with a P/E of about 7 (an earnings yield of about 13%), or that had a dividend yield of 7% has been sold and now is in "cash" earning nothing. Let's hope they do something with it soon else that will look earnings dilutive. I assume the Directors already have a plan before pulling their trigger.

I guess they could do worse than buy shares in a similar company with a P/E even lower, 6 say. Looking at the market ABDN might fit the bill.

Have I got this wrong? It reads to me that they are going to return the proceeds to shareholders.

Dod

Which they can do via a buyback. That way only those that want to participate in it will, and those that want the indirect benefits can too. An alternative distribution by dividends (or a special dividend) gives individual shareholders limited choice, and potential tax issues. (As well as the "interesting" solution of having capital returned as income).

No doubt many will see that as a good thing as an increase in "income", whilst missing the "one-off" nature of such a distribution and the reduction capital available to produce future income.

Dod101 wrote:

dealtn wrote:

idpickering wrote:Result of Secondary Placing

abrdn announces that it has sold an aggregate of 39,981,442 ordinary shares (the "Placing Shares") of its shareholding in Phoenix Group Holdings plc ("Phoenix"), representing approximately 4% of Phoenix's issued share capital, to institutional investors, at a price of 660 pence per share (the "Placing"), raising aggregate gross sale proceeds of approximately £264 million.

Following settlement of the Placing, which is expected to take place on 1 February 2022, abrdn's holding will represent approximately 10.4% of Phoenix's issued share capital and abrdn will continue to appoint a director to Phoenix's Board.

abrdn intends to return the net proceeds of the Placing to shareholders, with the method and timing of the return to be announced as soon as practicable after the Company's results on 1 March.

https://www.investegate.co.uk/abrdn-plc ... 00089143Z/

So £264mio that was invested in a business with a P/E of about 7 (an earnings yield of about 13%), or that had a dividend yield of 7% has been sold and now is in "cash" earning nothing. Let's hope they do something with it soon else that will look earnings dilutive. I assume the Directors already have a plan before pulling their trigger.

I guess they could do worse than buy shares in a similar company with a P/E even lower, 6 say. Looking at the market ABDN might fit the bill.

Have I got this wrong? It reads to me that they are going to return the proceeds to shareholders.

Dod

That’s how I read it Dod, hence my having linked this item to HYPP, as it might mean a special dividend, perhaps?

Ian.