THE first high-profile executive has headed for the exit following the giant merger between Scottish financial giants Standard Life and Aberdeen Asset Management.
David Cumming, head of equities at Standard Life Investments, the fund management arm of Standard Life, has quit less than a week after the £11 billion deal was unveiled.
It is expected that Mr Cumming, who has left to “pursue other interests”, will be the first in a series of senior executives to depart as the two companies complete their integration.
Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown, said: “We know that job losses are coming. We will, as the merger takes shape, see people voluntarily leave as well, particularly people in senior roles who have perhaps been there a long time and simply may decide that this is the right time to call it a day.
“He’s the first guy to come out and say he is shipping off. I suspect before we see the two companies are actually merged we might see a few others as well.”
The financial world was stunned last weekend when it emerged that Aberdeen Asset Management and Standard Life were to merge. With a combined £660 billion of assets under management, the deal will create one of the biggest fund managers in the world.
But there are fears that the merger could spark hundreds of job losses, with bosses declaring that they will seek to create £200 million of efficiency savings in the next three years.
Standard Life boss Keith Skeoch and Aberdeen chief executive Martin Gilbert declined to give any guidance on job cuts when they unveiled the deal on Monday, though the companies have signalled that there is overlap between the organisations in certain functions. Standard Life has a workforce of around 5,000 in Scotland, mostly in Edinburgh, and 6,500 globally, while Aberdeen employs 800 of its 2,800 headcount in Scotland.
Questions have also been raised over the decision to install Mr Skeoch and Mr Gilbert as joint chief executives of the combined company.
Mr Khalaf said: “It’s a bit strange. I suspect it is not really sustainable over the long term. I think we need to take it at face value that this is the modus operandi for the foreseeable future. But perhaps once the merger has happened we will see a normalisation at the top of the combined company, because it does lead to ambiguity of leadership.
“I know the two guys are relatively good friends, but that doesn’t mean it is easy to do the job with your leg tied to someone else.”
Mr Cumming, who was responsible for £27 billion of UK assets as head of equities at SLI, joined the company as investment director in 1998, having previously held roles with firms such as Royal London Mutual and Edinburgh Fund Managers. He was appointed head of UK equities in 2000 and joined the board as executive director in 2004.
SLI said Stan Pearson, head of European equities, has become acting head of equities in light of Mr Cumming’s departure. Andrew Millington, director of equity research, is now acting head of UK equities.
Rod Paris, chief investment officer at SLI, said: “I wish Stan and Andrew every success in their interim positions - making these internal appointments demonstrates the depth of talent we have within the 73-strong equities team.
“I would also like to thank David for his support and contribution to the business over the many years we have worked together, and wish him the very best.”
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