Aberdeen Asset Management, the distressed fund manager, yesterday warned that it would cut jobs as it unveiled earnings hit by its exposure to split capital investment trusts and the fall in equity markets.
Martin Gilbert, Aberdeen's chief executive, said he would make "selective" job cuts among the company's 1,200 worldwide staff.
The move came as Aberdeen, which has the highest exposure to splits among all UK fund managers, said that eight of its 19 trusts were in serious trouble.
As a result, Aberdeen has agreed to waive management fees worth £4.5m a year. It will not start charging again until the performance of splits improves.
Aberdeen also said organic net new business of £552m for the six months to the 31 March was virtually wiped out by the £530m it has had to make in debt repayments and share buy backs on splits.
Aberdeen faces potential legal action from disgruntled investors, who believe they were mis-sold splits. Splits, so-called because they include both growth and income shares, have suffered recently because of their high level of gearing and due to the fact that many are cross invested in each other, creating a domino-effect of underperformance throughout the sector.
Mr Gilbert said: "We are under a cloud at the moment. We have just got to get out from under it and that will happen if there is growth in the market."
Aberdeen also suffered a 40 per cent fall in sales of individual savings accounts. The figure is in line with the market, but many of Aberdeen's major rivals managed a more respectable performance this ISA season.
Aberdeen is bracing itself for the removal of £9bn of funds it manages for Scottish Provident. The money is being transferred to the business' new owner Abbey National.
Elsewhere, Aberdeen put in a more respectable performance, boosted by investments in property and bonds. Pre-tax profit rose 10 per cent to £22m. It shares recovered 10p from last week's low to 237.5p.Reuse content