The execution of Standard Life’s strategy has accelerated over the last year with the acquisition of Ignis Asset Management and the disposal of its Canadian companies. Over recent months David and the Standard Life Board have been discussing the development of our senior leadership and succession planning to continue the delivery of our strategy. In light of this, the Board and David have agreed that this is the right time to hand over to his successor.

Sir Gerry Grimstone, Chairman said:  “David has shown great leadership over the last six years and the outstanding progress we have made in that time has been achieved through his incredible drive and determination. He has changed the shape of Standard Life allowing us to successfully grow globally through world class investment management and distribution businesses. On behalf of the Board I would like to say thank you and pay tribute for all that he has achieved. He leaves the business in extremely good shape with a clear and successful strategy, strong operational performance and a depth of leadership talent.

“I am very pleased that Keith Skeoch is to become our new Chief Executive. He’s been an integral member of Standard Life’s senior team over the last 11 years. Under Keith’s leadership the asset management part of our group has developed into a leading global player. He has an exceptional understanding of world markets and the opportunities they offer, and has the right talent and experience to continue to deliver our strategy and take Standard Life on the next stage of our journey.”

David Nish, said: “One of the most important responsibilities of a Chief Executive is recognising both the right time to pass the baton and also to help ensure it is passed on to the right person. Now is the right time for both the group and myself. It has been an absolute privilege to lead Standard Life for the last six years and to help build our business into the strong global player it is today.

“I’d like to take this opportunity to thank every single person who has helped to make Standard Life the company it is today. The business is full of inspirational people who work hard every day to do the best that they can for our customers and clients. Our people are truly the best.

“For me it will be a time of mixed emotions as I prepare for a new future, however I know that Standard Life is in good hands. Keith is the right person to continue to deliver on our strategy and I wish him every success for the future.”

Keith Skeoch said: “I am delighted to have the opportunity to lead Standard Life. Standard Life has been both transformed and simplified in recent years. This has put the fundamentals in place to build a world class business with investment management at its heart, serving savers and investors through our strong and innovative distribution channels. It’s a great honour to have the responsibility for the next phase of our growth and I’m excited by the challenge.

“I’d like to thank everyone across the business who has worked so hard to make this possible and David for handing the company over in such strong shape.”

Keith will continue in his role as Chief Executive of Standard Life Investments until a transition is effected.

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This analysis is part of the latest edition of Global Outlook which highlights that households should benefit but oil service companies will suffer along with countries heavily dependent on oil exports.

Keith Skeoch, CEO Standard Life Investments said:  “The effects of the oil price decline are being priced in now, for example in the Russian currency, the share price of UK oil companies and the energy sector of the US high yield debt market. So on balance we conclude that supply side rather than demand side factors are more important, and into Spring 2015 we should start to see the more beneficial effects of cheaper energy feed through, in consumer spending and non-oil corporate investment.”

Further comments from Standard Life Investments on the impact of oil on different markets:

Andrew Milligan, Head of Global Strategy: “Fund managers need to be highly selective, bearing in mind the different effects of significant currency and commodity movements, growing yield differentials and more volatile capital flows. As an example, oil is driving divergence between countries and sectors. This is another reason to stay neutral on emerging markets as a whole, relying on stock selection decisions to add greater value to portfolios.”

Susan Tarry, Investment Director, European Equities: “The scale of oil’s decline is such that it represents material incremental change for those stocks we already like or dislike for fundamental reasons. We see opportunity in the airline industry, Ryanair in particular, but envisage growing risks for companies like the oil equipment and services company Saipem.”

Mark Vincent, Investment Director, GEM Equities: “On current estimates, oil at this level will cost Russia $100 billion a year, while sanctions due to the Ukraine crisis will account for a further $40 billion. But not everyone is lamenting the fall of the rouble. One company that is thriving is Norilsk Nickel, Russia’s largest mining company which produces nickel and palladium, mostly sold overseas. These metals are priced in dollars which means the greenback’s strength against the rouble is a boon for its operations and profits.”

Richard House, Head of Emerging Market Debt: “Falling oil prices have significant implications for Venezuela, with the dominance of oil revenue in trade and fiscal accounts. Authorities seem reluctant to alter policies in response, and despite Venezuela having the largest oil reserves globally, the market prices in a high probability of sovereign default in the next few years.

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Standard Life Investments now operates out of 17 countries worldwide – Canada, Australia, the US, Hong Kong, China, Germany, Sweden, Switzerland, Ireland, Italy, Spain, Korea, France, the Netherlands, Belgium, Japan and the UK. The main investment and operations hubs are in Edinburgh, Hong Kong, London and Boston.

Due to this global expansion ten new international offices have opened or will shortly open in New York, Los Angeles, Toronto, Munich, Tokyo, Zurich, Stockholm, Brussels, Milan and Madrid. These offices will principally provide closer support to clients.

The business is also expanding its London office plus US and Hong Kong hubs – taking the entire floor of 1 Beacon Street in Boston, and an additional floor in The Gherkin, St Mary Axe. The Paris team has moved to new bigger offices, the Sydney office is in the process of doubling in size, and the Frankfurt team will move to new larger premises in Spring 2015.

Standard Life Investments has also signed a lease to occupy the entire office space available within the new £75m development underway at St Andrew Square in Edinburgh, from 2017.  The premises will provide space for over 1000 people in addition to Standard Life Investments’ existing headquarters building at 1 George Street.

Keith Skeoch, CEO, Standard Life Investments said: “Standard Life Investments has seen considerable global expansion in 2014, both in assets under management and people. This organic growth along with the recent integration of Ignis Asset Management and Standard Life Wealth, plus the global collaboration agreement with Manulife, means we needed to prepare for the future and ensure we have the right strategy for our long-term estate portfolio worldwide.

“The new premises in Edinburgh are just across the road from our existing HQ and will provide our people with the right high quality office environment to foster continued success as we expand our global asset management capability.”

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The first half of 2014 saw third party net inflows of AUD 7.7bn, record third party assets under management (AUM) of AUD 195.6bn, record total AUM of AUD 353.5bn and record operating profit before tax of AUD 189.8m.

Keith Skeoch, CEO, Standard Life Investments said “I am privileged to have been the CEO at Standard Life Investments for just over ten years now and pleased to be able to report another strong set of half year results. However, as a firm believer in the benefits of long term active investing, what pleases me most are the strong relationships we have established with institutional and retail clients around the world over the past ten years. A defining decade for Standard Life Investments which, despite some of the most volatile and challenging markets experienced in recent times, has seen:

• Third party AUM increase over six-fold from AUD 39.5bn to AUD 195.6bn*
• An unbroken decade of third party net inflows with cumulative net inflows of AUD 120.9bn representing a ten year CAGR of 14%, accounting for two-thirds of the increase in AUM
• Third party net inflows from overseas clients increase from 3% to 57%
• Operating profit increase over ten-fold from AUD 15.5m to AUD 189.8m
• Excellent investment performance with third party AUM above benchmark: one year 87%; three years 89%; five years 91%; ten years 81%
• Standard Life Investments become the largest active manager of purely UK Pension Assets, up from 20th position in 2004**
• Standard Life Investments move from 39th in 2004 to 5th in 2014 for UK retail AUM***

“The strength of our investment performance and net inflows over the last decade mark Standard Life Investments out as one of the leading asset managers. Our success and rapid growth as an active fund manager in a decade that saw a general increase in the use of passive strategies is testimony to our ‘Focus on Change’ investment philosophy. There is also growing global recognition of the benefits clients can gain by working with a manager who is seen to add value by taking a long term approach to investing.

“The addition of Standard Life Wealth and Ignis Asset Management present a great opportunity for us going forward. They will help deepen our investment capabilities, broaden our third party client base and strengthen our strategic position.

“I am confident that as we look forward to the next ten years Standard Life Investments has the proven investment expertise and global distribution capabilities that will continue to deliver both superior investment performance and innovative solutions for our clients.”

———-

*If the AUD 107.6bn of Ignis Asset Management funds, as at 31 Dec 2013, are included the increase is over ten-fold. ** Source FT research. *** Standard Life Investments

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Latest Global Outlook report released by Standard Life Investments

Standard Life Investments, the global investment manager, believes that global equity markets can move higher if corporate earnings come through and companies invest their war chests of cash.

Speaking about the latest edition of Global Outlook, Keith Skeoch, Chief Executive, Standard Life Investments said: “Risk based assets such as equities and real estate can make further progress given the positive economic momentum. However a key issue that will determine the pace of recovery and return will be the extent to which companies step up to the plate and put their cash balances to work in generating growth.”

He added: “A recovery in US business investment during 2014 will signify that the upturn is self-sustaining and raise confidence about asset returns. This could also be the year of the merger if a number of larger firms deploy their cash to buy up attractive smaller companies.”

The Global Outlook also states that financial markets are being tugged in opposing directions, on the one hand by an improving global economy, on the other by worries about policy decisions, structural reforms and politics. However, Standard Life Investments’ House View remains confident about the ability of companies to generate positive cash flows into 2014. Global equity markets range from fair value to moderately expensive which is justified by the currently supportive policy environment and expectations of better profits growth.

Standard Life Investments remains Heavy in equities and real estate, Neutral in credit, emerging market debt and cash and Light in government bonds. Favoured equity markets include the UK, US and Japan, reflecting our forecasts for better corporate earnings growth and domestic demand into 2014.

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Keith Skeoch, CEO, Standard Life Investments said: “Standard Life Investments has been very successful in expanding our operations in various parts of the world, including establishing strong presences in Europe, Asia, the USA, Canada, India and Japan. As we continue to diversify geographically Standard Life Investments will be considering the most appropriate strategy to establish a broader presence in Australasia by offering clients access to a range of our award winning investment solutions.

“Globally, Standard Life Investments has a total of AUD$311bn (GBP£179.6bn) in funds under management, and already has a number of established relationships in Australia. We recognise the need Australia has for high quality investment skills, expertise and investment performance. Peter’s background in financial services will greatly assist us in developing a better understanding of our opportunities.”

Peter Young, Chairman, Australia and New Zealand, Standard Life Investments said: “Standard Life Investments has an enviable reputation as a global asset manager and has been active in Australia since 2007. My appointment is further evidence of Standard Life Investments’ commitment to the region and belief that we can become an increasingly significant participant in this competitive market.”

Peter’s appointment follows the recent hires of Matthew Newham, Investment Director, and Jill Shaw, Investment Director, to Standard Life Investments’ Sydney office.

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Standard Life Investments, the global fund manager, today announced record half year results for the six month period ended 30 June 2013.

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