Martin Gilbert CA: the inside story of the Aberdeen Asset Management and Standard Life merger
The merger of Aberdeen Asset Management and Standard Life was completed yesterday to form Standard Life Aberdeen plc, creating one of the largest global asset managers and the largest active manager in the UK.
Speaking on the successful merger, Martin Gilbert CA, co-chief executive of Standard Life Aberdeen and ICAS Conference Speaker said: "As ever our priority remains the delivery of strong investment performance and the highest level of client service.
"The merger deepens and broadens our investment capabilities, and gives us a stronger and more diverse range of investment management skills as well as significant scale across asset classes and geographies.
"We believe this will enable us to deliver an even better proposition and service to our enlarged client base."
We caught up with Martin earlier this year in the run-up to the merger.
The background to the deal
Back in May, Aberdeen Asset Management was on the brink of another big deal – a mutually agreed merger with financial services giant Standard Life. The combined business will be the biggest asset manager outside the US in terms of revenue and the second biggest in terms of assets under management.
In this share-based merger, Aberdeen Asset Management is the smaller partner. But for Martin - then CEO of Aberdeen - the rationale behind the deal is clear: “To build a world-class investment company.”
He explained: “We are highly complementary businesses. In absolute return products, Standard Life is a world leader and I like to think that, in emerging markets, we’re strong. I think the combination is very powerful.”
In total, Aberdeen has £302.6bn in assets under management (as of 31 December 2016).
Standard Life employs 6,300 people worldwide, including 5,500 in the UK; Aberdeen has 2,800 employees, of whom 1,500 are in the UK.
A new form of leadership?
Martin and Standard Life’s Keith Skeoch had been appointed co-chief executives, under the chairmanship of Sir Gerry Grimstone, who was then chairman at Standard Life. Martin said: “Keith and I are complementary in terms of our abilities and what we’re interested in doing.”
He adds that co-chief executives are not that uncommon in the financial services sector. In a statement, Standard Life and Aberdeen said that Keith will have accountability for “the day-to-day running of the fabric of the combined business” and Martin will be accountable for “external matters, including international activities, distribution including client engagement and business development, marketing and corporate development.”
Martin explained that some Aberdeen staff were working with the Standard Life management, and vice versa, to ensure that the two organisations do not start out with a “them and us” mentality. He had hoped that the merger could go through as early as June. He said: “The key, really, is about building something that is relevant globally.”
The move, Martin said, positions the merged business as a strong brand that is all about solutions for clients, not just about specific investment products. Both brands are likely to be retained, with a holding company that incorporates both names: “Aberdeen Standard” is one option.
Evolving with technology
Fund management has changed a lot from what Martin describes as a “cottage industry” when Aberdeen was founded. He believes that technology will continue to change the industry, but he sees the key challenges coming from the established players that can adapt their business models, rather than new entrants disrupting the market.
He said: “We operate in a tightly regulated business… Many of the specialist ‘Internet banks’ failed because the established banks themselves became Internet banks. So we have to become ‘robo-advisers’ and platform businesses, and that’s what we are doing.”