Citing unfavourable press reports of its troubles Aberdeen Asset Management is seeking to calm fears...
Citing unfavourable press reports of its troubles Aberdeen Asset Management is seeking to calm fears among investors in its unit trust and OEIC products by sending out a Questions & Answers update on its current corporate status.
The Q&A form states categorically that AAM is not going to become insolvent, and say that even were that to happen, then clients' assets would be unaffected.
The value of the assets within the collective investment vehicles managed by AAM would not be able to lose all their value unless there was a "worldwide, economic implosion".
AAM uses the Q&A document to defend the bonuses that have been announced for directors even as the company is struggling to keep its split capital investment trusts alive.
The company says that "directors in our UK mainstream businesses are unlikely to receive a bonus for the financial year just ended" because of the losses experienced in the markets.
On the issue of split capital investment trusts, AAM says that only one unit trust, Aberdeen Progressive Growth, actually has a mandate to invest in splits.
AAM says much of its troubles are the result of over-hyped media reporting of the troubles affecting its splits business, which it argues only represents a small proportion of is overall business.
It also says the media attention is unlikely to "abate fully until the Regulator (sic) (the FSA) has completed its review of the split capital closed end fund sector - this is likely to take a number of months."
Meanwhile, the value of investments is unlikely to recover, making 2002 the third year in a row that equity markets decline, something that has only occurred twice before in 1929-31 and 1947-49.
AAM says global economic growth is likely to remain patchy through next year.
To view Aberdeen's mailout, click thru the right-hand web links.
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