Middle East war may fuel inflation, says Aberdeen CEO, but global growth hit seen limited

By Iain Withers

LONDON, March 3 (Reuters) - Escalating conflict in the Middle East could stoke inflation by driving energy prices higher but is unlikely to derail global growth, Aberdeen ABDN.L CEO Jason Windsor said on Tuesday as the British asset manager posted forecast-beating annual profit.

The results still underwhelmed investors and shares sank 8% in early trading.

A broader global sell-off in stocks deepened on Tuesday, and the FTSE 250 fell nearly 3% as investors weighed the implications of U.S. and Israeli strikes on Iran on energy prices and the global economy.

"It could be inflationary if it persists," Windsor told reporters, adding the asset manager felt the economic contagion of the conflict may be limited. "Our overriding view is that it won't have a major impact on global growth."

UAE STAFF ADVISED TO SHELTER AT HOME

Aberdeen was advising staff in its office in the United Arab Emirates to shelter at home and was helping some who were stuck in the region to get home, including via flights from Saudi Arabia, Windsor said.

The London-based company reported a 4% rise in annual profit, in part due to deeper-than-forecast cost-cutting. Still, strong performance at its consumer platform Interactive Investor was overshadowed by muted results at other units serving institutions and providing investment advice which were bleeding client cash.

European active money managers have broadly reported improved results but remain under competitive pressure from larger U.S. rivals such as BlackRock BLK.N offering cheaper index-tracking funds.

Britain's Schroders SDR.L agreed to a 9.9 billion pound takeover by U.S. asset manager Nuveen NIM.N last month, highlighting the search for scale by European players.

FOCUSING ON SCALE IN SPECIALIST AREAS

Aberdeen can still compete with larger competitors, Windsor said, adding it was focused on scale in specialist areas within equities, fixed income and real assets.

The company posted adjusted operating profit of 264 million pounds ($353 million), up 4% on 2024, and said it had delivered 180 million pounds of cost savings, exceeding its 150 million target.

Aberdeen added, however, that its advice business would not hit its 1 billion pound net inflow target until 2027.

The company had already reported a 9% rise in managed assets to 556 billion pounds and net outflows of 3.9 billion pounds - at a time when many rivals have recorded inflows - in a trading update in January.

($1 = 0.7488 pounds)