Aberdeen’s £140m rainy-day fund hike casts cloud on rivals

Fund managers could face a sharp rise in the amount of capital they have to hold for rainy days after the regulator told one of the largest to up its minimum held by £140 million.

Aberdeen Asset Management said the Financial Conduct Authority had told it to raise the minimum level of capital it must hold from £335 million to £475 million.

It said it had already kept its level of extra capital at £435 million and would be able to find the extra £40 million required by the regulator.

Aberdeen said the uplift came roughly equally from two areas of regulation. The first is the removal of mitigation to risks which are covered by insurance and the second an increase against “unsighted and unquantifiable risks” not covered by regulations.

Shares in Aberdeen fell 9.1p, or 3%, to 316.4p on the news, and shares in other fund managers saw similar falls amid worries over the potential impact on dividends.

Analysts at Credit Suisse said they did not think this would be the case, particularly since the fund manager’s profits are likely to have been boosted by weak sterling.

They added: “We would be surprised if Aberdeen is alone among its peer group in being required to hold more capital.”