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Standard Life Aberdeen vice chair to retire from company he helped found

Martin Gilbert is leaving Standard Life Aberdeen, the asset manager he helped found more than three decades ago.

Gilbert lost his grip on power at Standard Life in March when the Edinburgh-based asset manager scrapped its co-CEO structure that had been in place since the company was created in a 2017 merger. The 64-year-old was made vice chairman, while fishing companion and friend Keith Skeoch became the sole chief executive officer.

“It has been an incredible journey, almost unimaginable from the earliest days when we were just three people in one office in Aberdeen with 50 million pounds ($61.3 million) under management,” Gilbert said in a statement from Standard Life on Wednesday. “I still have a great enthusiasm for growing and guiding businesses and I am looking forward to fresh challenges in the next stage of my career.”

The cash return can be taken as a sign that the company doesn’t have any large acquisition plans, Standard Life Aberdeen co-CEO Martin Gilbert says.

Gilbert’s departure from one of U.K.’s largest asset managers comes after the firm failed to stanch the bleeding of assets as clients yanked $19.5 billion in the first six months of the year.

Gilbert helped build Aberdeen Asset Management through dozens of acquisitions starting in the early 1980s. The combination of Aberdeen and Standard Life two years ago was intended to create a heavyweight capable of competing with low-fee passive money managers that have seized an increasing share of the market in recent years.

As standalone companies the two struggled, and it has been a similar story for the combined companies. Standard Life Aberdeen saw more than $86 billion of outflows in 2017 and 2018 and the tie-up thwarted one its biggest institutional contracts.

U.K. fintech startup Revolut’s CEO Nikolay Storonsky said in early August that Gilbert and he were in talks about him joining Revolut’s board.

Gilbert’s asset management career began after he joined the law firm Brander & Cruickshank in Aberdeen, a Scottish city facing the North Sea, in 1982. Within a year, Gilbert and two of his colleagues bought the law firm’s investment trust unit.

Over the next three decades, Gilbert engineered more than 40 deals, navigating over a dozen market downturns and the financial crisis in 2008 to eventually turn Aberdeen Asset Management into one the U.K.’s largest money managers. In 2012, with about $213.7 billion in assets under management, the company made it onto the FTSE 100.

Troubles started to mount after its entry onto the bluechip index. The firm had to fight outflows, as investors shifted into cheaper passive funds. Gilbert finally agreed to the deal with Skeoch, the CEO of Standard Life, which had been suffering withdrawals from its flagship funds.

The two men disclosed an all-share transaction in March 2017 in a bid to benefit from strength in numbers and gain economies of scale. Gilbert said at the time the firm could eventually join “that $1 trillion club.” They also got into an unconventional management structure: the friends of 30 years became co-CEOs of the business.

The company justified the move by saying Skeoch would manage day-to-day business operations, while Gilbert would be responsible for “external matters” such as client engagement, marketing and business development. The arrangement was abandoned earlier this year.

The average annualized return of the top 20 funds has been nearly 15%.
May 16

Standard Life lost the majority of its $127.7 billion contract with Lloyds Banking Group, in what was one of the most high-profile disputes in the U.K. fund management industry’s history. Lloyds agreed to pay Standard Life $171.9 million in cash as compensation and leave $43 billion of the total under their management until April 2022, according to a statement on July 24.

The scrapping of the dual-CEO structure was intended to streamline reporting lines and facilitate the next stages of the merger, which is 75% complete, the company said in a statement in March.

Gilbert has been on the board since Standard Life’s 2017 merger and was previously on the board of Aberdeen from 1983. He is also on the advisory board at Tennor Holding, the investment vehicle of German financier Lars Windhorst, and is a senior independent director on the board of commodities trader Glencore.

Bloomberg News