A SCOTTISH fund management giant with nearly £600 billion of assets under management could be set to be created after Aberdeen Asset Management and Standard Life were linked with merger talks.

It emerged today that talks between the FTSE 250 investment house Aberdeen and Standard Life, the Edinburgh insurance giant which has gradually transitioned into fund management, have taken place over an £11bn deal.

Fears have been expressed that a merger could lead to significant Scottish job losses, though it was reported that the deal could be in jeopardy because news of the discussions were leaked.

Aberdeen has £312bn of funds under management, while Standard Life Investments, the fund management arm of Standard Life, oversees funds of £269bn.

Martin Gilbert, the chief executive of Aberdeen, said last month that the Trump victory in the US election had spooked investors as the firm reported a fifteenth consecutive quarter of net outflows from its funds.

That came before Standard Life boss Keith Skeoch declared last week that the company does not envisage moving thousands of staff because of the Brexit vote. Mr Skeoch said the company is used to dealing with regulatory complexities overseas as Standard Life reported profits which were better than expected. Assets under management at Standard Life Investments increased 16 per cent to £357bn from £307.4bn.