Broker snap: Aberdeen update impresses Citi

Date: Monday 26 Sep 2011

Citi reiterates its buy/medium risk rating on Aberdeen Asset Management after the fund manager’s trading update today.

At £176.9m, assets under management were 3% higher than Citi’s forecasts of £172.5bn.

“Despite a challenging market backdrop, stronger than industry fund flows are reassuring,” Citi notes.

“Also, Aberdeen’s recent pay down of bond debt will reduce interest costs (helping the bottom line) and we see scope for management of other costs: we estimate staff costs make up 60% total, and around 1/3 of non-staff costs are outsourced third party administration costs which vary with AUM levels.”

Citi has a 230p target price on Aberdeen.

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