REG - abrdn PLC - Final Results - Part 6 of 8
28/02/2023 07:16
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RNS Number : 2291R abrdn PLC 28 February 2023
abrdn plc
Full Year Results 2022
Part 6 of 8
31. Pension and other post-retirement benefit provisions
The Group operates two types of pension plans:
- Defined benefit plans which provide pension payments upon retirement
to members as defined by the plan rules. All of the Group's defined benefit
plans, with the exception of a small plan in Ireland, are closed to future
service accrual.
- Defined contribution plans where the Group makes contributions to a
member's pension plan but has no further payment obligations once the
contributions have been paid.
The Group's liabilities in relation to its defined benefit plans are valued by
at least annual actuarial calculations. The Group has funded these liabilities
in relation to its UK and Ireland defined benefit plans by ring-fencing assets
in trustee-administered funds. The Group has further smaller defined benefit
plans some of which are unfunded.
The statement of financial position reflects a net asset or net liability for
each defined benefit pension plan. The liability recognised is the present
value of the defined benefit obligation (estimated future cash flows are
discounted using the yields on high quality corporate bonds) less the fair
value of plan assets, if any. If the fair value of the plan assets exceeds the
defined benefit obligation, a pension surplus is only recognised if the Group
considers that it has an unconditional right to a refund of the surplus from
the plan. The amount of surplus recognised will be limited by tax and
expenses. Our judgement is that, in the UK, an authorised surplus tax charge
is not an income tax. Consequently, any UK surplus is recognised net of this
tax charge rather than the tax charge being included within deferred taxation.
For the principal defined benefit plan (abrdn UK Group plan), the Group
considers that it has an unconditional right to a refund of a surplus,
assuming the gradual settlement of the plan liabilities over time until all
members have left the plan. The plan trustees can purchase annuities to insure
member benefits and can, for the majority of benefits, transfer these
annuities to members. The trustees cannot unconditionally wind up the plan or
use the surplus to enhance member benefits without employer consent. Our
judgement is that these trustee rights do not prevent us from recognising an
unconditional right to a refund and therefore a surplus.
Net interest income (if a plan is in surplus) or interest expense (if a plan
is in deficit) is calculated using yields on high quality corporate bonds and
recognised in the consolidated income statement. A current service cost is
also recognised which represents the expected present value of the defined
benefit pension entitlement earned by members in the period. A past service
cost is also recognised which represents the change in the present value of
the defined benefit obligation for service in prior periods, resulting from an
amendment or curtailment to a plan.
Remeasurements, which include gains and losses as a result of changes in
actuarial assumptions, the effect of the limit on the plan surplus and returns
on plan assets (other than amounts included in net interest) are recognised in
other comprehensive income in the period in which they occur. Remeasurements
are not reclassified to profit or loss in subsequent periods.
For defined contribution plans, the Group pays contributions to separately
administered pension plans. The Group has no further payment obligations once
the contributions have been paid. The contributions are recognised in current
service cost in the consolidated income statement as staff costs and other
employee-related costs when they are due.
Defined contribution plans
The defined contribution plans comprise a mixture of arrangements depending on
the employing entity and other factors. Some of these plans are located within
the same legal vehicles as defined benefit plans. The Group contributes a
percentage of pensionable salary to each employee's plan. The contribution
levels vary by employing entity and other factors.
Defined benefit plans
UK plans
These plans are governed by trustee boards, which comprise employer and
employee nominated trustees and an independent trustee. The plans are subject
to the statutory funding objective requirements of the Pensions Act 2004,
which require that plans be funded to at least the level of their technical
provisions (an actuarial estimate of the assets needed to provide for benefits
already built-up under the plan). The trustees perform regular valuations to
check that the plans meet the statutory funding objective.
While the IAS 19 valuation reflects a best estimate of the financial position
of the plan, the funding valuation reflects a prudent estimate. There is no
material difference in how assets are measured. The funding measure of
liabilities (technical provisions) and the IAS 19 measure are materially
different. The key differences are the discount rate and inflation
assumptions. While IAS 19 requires that the discount rate reflect corporate
bond yields, the funding measure discount rate reflects a prudent estimate of
future investment returns based on the actual investment strategy. The funding
valuation adopts a market consistent measure of inflation without any
adjustment. The IAS 19 RPI inflation assumption is derived from market-implied
RPI inflation with an adjustment to remove the inflation risk premium believed
to exist within market prices, with an additional deduction required to derive
the IAS 19 CPI inflation assumption (to reflect differences between RPI and
CPI).
The trustees set the plan investment strategy to protect the ratio of plan
assets to the trustees' measure of the value of assets needed to meet the
trustees' objectives. This investment strategy does not aim to protect the IAS
19 surplus or the ratio of plan assets to the IAS 19 measure of liabilities.
After consulting the relevant employers, the trustees prepare statements of
funding and investment principles and set a schedule of contributions. If
necessary, this schedule includes a recovery plan that aims to restore the
funding level to the level of the technical provisions.
abrdn UK Group (SLSPS) plan(1) (principal plan) This is the Group's principal defined benefit plan. The plan closed to new
membership in 2004 and changed from a final salary basis to a revalued career
average salary basis in 2008. Accrual ceased in April 2016.
Following a High Court ruling against a third party's pension scheme in 2018,
that required pension schemes to address inequalities for the effect of
unequal GMPs accrued between May 1990 and April 1997, an allowance for assumed
equalisation was recognised as a past service cost for our principal defined
benefit plan in 2018 and this adjustment has been carried forward to 2022.
There was a further judgement in 2020 requiring pension schemes to address
inequalities for the effect of unequal GMPs for those beneficiaries that
transferred out of the scheme between May 1990 and October 2018. The
estimated impact is immaterial and was recognised as a past service cost in
2020 and this adjustment has been carried forward to 2022.
The funding of the plan depends on the statutory valuation performed by the
trustees, and the relevant employers, with the assistance of the scheme
actuary - i.e. not the IAS 19 valuation. The funding valuation was last
completed as at 31 December 2019, and measured plan assets and liabilities to
be £4.6bn and £3.3bn respectively. This corresponds to a surplus of £1.3bn
and funding level of 140%. As there is currently no deficit, no recovery
plan is required.
Following actions taken in recent years to reduce risk in abrdn's principal
defined benefit pension plan, we are working with the trustee on next steps.
In connection with this de-risking work, the trustee expects to submit a
petition to the Court of Session during H1 2023 that will seek direction on
the destination of any residual surplus assets that remain after all
plan-related obligations are settled or otherwise provided for. Any such
residual surplus would be determined on a different basis to the IAS 19 or
funding measures of the plan surplus. The IAS 19 defined benefit plan asset is
not included in abrdn's regulatory capital surplus.
Other UK plans The Group also operates two UK defined benefit plans as a result of the
acquisition of Aberdeen Asset Management PLC (now renamed abrdn Holdings
Limited) in 2017. These plans are final salary based, with benefits depending
on members' length of service and salary prior to retirement. At the last
statutory valuation date (30 June 2019), both plans were in deficit and the
Group agreed funding plans with the plans' trustees which aimed to eliminate
the deficits (the 30 June 2022 statutory valuation is in progress). At 31
December 2022, one of the two schemes is in surplus on an IAS 19 basis.
Other plans
abrdn ROI plan(1) In December 2009, this plan closed to new membership and changed from a final
salary basis to a career average revalued earnings (CARE) basis. Following the
sale of the UK and European insurance business in 2018, there remain fewer
than 10 employees who continue to accrue benefits under this plan.
At the last funding valuation, effective 1 January 2022, the plan was 73%
funded on an ongoing basis.
Other The Group operates smaller funded and unfunded defined benefit plans in other
countries.
1. Previously included as UK Standard Life Group plan and Ireland Standard
Life plan respectively.
Plan regulations
The plans are administered according to local laws and regulations in each
country. Responsibility for the governance of the plans rests with the
relevant trustee boards (or equivalent). The UK pensions market is regulated
by the Pensions Regulator whose statutory objectives and regulatory powers are
described on its website, www.thepensionsregulator.gov.uk
(a) Analysis of amounts recognised in the consolidated income statement
The amounts recognised in the consolidated income statement for defined
contribution and defined benefit plans are as follows:
2022 2021
£m £m
Current service cost 56 53
Net interest income (32) (21)
Administrative expenses 3 4
Expense recognised in the consolidated income statement 27 36
Contributions made to defined contribution plans are included within current
service cost.
Contributions to defined benefit plans in the year ended 31 December 2022
comprised £14m (2021: £14m) to the Other UK plans and the abrdn ROI
plan. Contributions are expected to be £8m in 2023 and are expected to
further reduce in the two subsequent years. These contributions include a
mixture of deficit funding and funding to achieve a targeted level of overall
financial strength.
(b) Analysis of amounts recognised in the consolidated statement
of financial position
2022 2021
Principal Other Total Principal Other Total
plan
plan
£m £m £m £m £m £m
Present value of funded obligation (1,755) (228) (1,983) (2,899) (350) (3,249)
Present value of unfunded obligation - (3) (3) - (3) (3)
Fair value of plan assets 3,001 251 3,252 5,337 349 5,686
Net asset/(liability) before the limit on plan surplus 1,246 20 1,266 2,438 (4) 2,434
Effect of limit on plan surplus(1) (436) (11) (447) (853) (12) (865)
Net asset/(liability) 810 9 819 1,585 (16) 1,569
1. UK recoverable surpluses are reduced to reflect an authorised surplus
payments charge of 35% that would arise on a refund. This applies to both the
principal plan surplus and the defined benefit plan within Other which has a
net asset of £21m at 31 December 2022 (2021: £22m).
Other comprises a defined benefit plan asset of £21m (2021: £22m) and a
number of other defined benefit plans with a total liability of £12m (2021:
£38m).
A pension plan surplus is considered to be recoverable where an unconditional
right to a refund exists. The principal plan surplus has reduced significantly
in 2022 due to market movements, primarily driven by the increase in UK high
quality bond yields with a smaller impact from UK inflation changes during
2022.
(c) Movement in the net defined benefit asset
Present value Fair value of Total Effect of limit on plan surpluses Total
of obligation
plan assets
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m £m £m
At 1 January (3,252) (3,394) 5,686 5,596 2,434 2,202 (865) (783) 1,569 1,419
Total expense
Current service cost - - - - - - - - - -
Interest (expense)/income (65) (48) 115 80 50 32 (18) (11) 32 21
Administrative expenses (3) (4) - - (3) (4) - - (3) (4)
Total (expense)/income recognised in consolidated income statement (68) (52) 115 80 47 28 (18) (11) 29 17
Remeasurements
Return on plan assets, excluding amounts included in interest income - - (2,473) 120 (2,473) 120 - - (2,473) 120
Gain from change in demographic assumptions 5 - - - 5 - - - 5 -
Gain from change in financial assumptions 1,450 144 - - 1,450 144 - - 1,450 144
Experience losses (211) (78) - - (211) (78) - - (211) (78)
Change in effect of limit on plan surplus - - - - - - 436 (69) 436 (69)
Remeasurement (losses)/gains recognised in other comprehensive income 1,244 66 (2,473) 120 (1,229) 186 436 (69) (793) 117
Exchange differences (6) 10 5 (7) (1) 3 - - (1) 3
Employer contributions - - 14 14 14 14 - (2) 14 12
Benefit payments 96 118 (95) (117) 1 1 - - 1 1
At 31 December (1,986) (3,252) 3,252 5,686 1,266 2,434 (447) (865) 819 1,569
(d) Defined benefit plan assets
Investment strategy is directed by the trustee boards (where relevant) who
pursue different strategies according to the characteristics and maturity
profile of each plan's liabilities. Assets and liabilities are managed
holistically to create a portfolio with the dual objectives of return
generation and liability management. In the principal plan this is achieved
through a diversified multi-asset absolute return strategy seeking consistent
positive returns, and hedging techniques which protect liabilities against
movements arising from changes in interest rates and inflation expectations.
Derivative financial instruments support both of these objectives and may lead
to increased or decreased exposures to the physical asset categories disclosed
below.
To provide more information on the approach used to determine and measure the
fair value of the plan assets, the fair value hierarchy has been used as
defined in Note 37. Those assets which cannot be classified as level 1 have
been presented together as level 2 or 3.
The distribution of the fair value of the assets of the Group's funded defined
benefit plans is as follows:
Principal plan Other Total
2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m
Assets measured at fair value based on level 1 inputs
Derivatives 9 8 - - 9 8
Equity securities 55 - - - 55 -
Debt securities 2,186 4,557 93 - 2,279 4,557
Total assets measured at fair value based on level 1 inputs 2,250 4,565 93 - 2,343 4,565
Assets measured at fair value based on level 2 or 3 inputs
Derivatives (7) 43 (3) 18 (10) 61
Equity securities 55 100 - - 55 100
Interests in pooled investment funds
Debt 284 440 16 12 300 452
Equity - - 6 18 6 18
Multi-asset private markets 224 194 - - 224 194
Property 95 139 12 12 107 151
Absolute return - 77 24 92 24 169
Cash 39 15 41 37 80 52
Debt securities 581 415 12 99 593 514
Qualifying insurance policies 2 3 45 76 47 79
Total assets measured at fair value based on level 2 or 3 inputs 1,273 1,426 153 364 1,426 1,790
Cash and cash equivalents 160 138 5 2 165 140
Liability in respect of collateral held (682) (792) - (17) (682) (809)
Other - - - - - -
Total 3,001 5,337 251 349 3,252 5,686
Further information on risks is provided at Section (g) of this Note. The
£2,872m (2021: £5,071m) of debt securities includes £2,550m (2021:
£4,884m) of government bonds (including conventional and index-linked). Of
the remaining £322m (2021: £187m) debt securities, £190m (2021: £108m) are
investment grade corporate bonds or certificates of deposit.
Included in the qualifying insurance policy asset of £47m (2021: £79m) is an
insurance policy purchased by the trustees of one of the Other UK defined
benefit plans to protect the plan against future investment and actuarial
risks.
The £682m liability in respect of collateral held (2021: £809m) consists of
repurchase agreements of £652m (2021: £786m), margins on derivatives of
(£10m) (2021: (£10m)) and collateral of £40m (2021: £33m).
One Other UK plan has a contract in place to hedge longevity risk for
pensioners. The fair value of this derivative is a liability of £1m at 31
December 2022 (2021: £nil).
(e) Estimates and assumptions
Determination of the valuation of principal plan liabilities is a key estimate
as a result of the assumptions made relating to both economic and non-economic
factors.
The key economic assumptions for the principal plan, which are based in part
on current market conditions, are shown below:
2022 2021
% %
Discount rate 4.85 2.05
Rates of inflation
Consumer Price Index (CPI) 2.75 2.85
Retail Price Index (RPI) 3.10 3.25
The changes in economic assumptions over the period reflect changes in both
corporate bond prices and market implied inflation. The population of
corporate bond prices excludes bonds issued by UK universities. The discount
rate assumption for 2022 adopts a new yield curve projection method, which
involves an earlier flattening of the curve compared to the previous approach
- the impact of this change on 2022 remeasurement losses is an increase of
c£17m. The inflation assumption reflects the future reform of RPI effective
from 2030 as described in Section (g)(i) below.
The most significant non-economic assumption for the principal plan is
post-retirement longevity which is inherently uncertain. The assumptions
(along with sample expectations of life) are illustrated below:
Normal Retirement Age (NRA) Expectation of life from NRA
Male age today Fe
ma
le
ag
e
to
da
y
2022 Table Improvements NRA 40 NRA 40
Plan specific basis (calibrated by Club Vita) reflecting membership Core parameterisation of the CMI 2019 mortality improvements model (SK 60 27 29 29 31
demographics parameter of 7.0), with an initial improvement (or 'A') parameter of +0.5% for
males and females, and a long-term rate of improvement of 1.5%.
Normal Retirement Expectation of life from NRA
Age (NRA)
Male age today Fe
ma
le
ag
e
to
da
y
2021 Table Improvements NRA 40 NRA 40
Plan specific basis (calibrated by Club Vita) reflecting membership Core parameterisation of the CMI 2019 mortality improvements model (SK 60 27 29 29 31
demographics parameter of 7.0), with an initial improvement (or 'A') parameter of +0.5% for
males and females, and a long-term rate of improvement of 1.5%.
These assumptions reflect a cautious allowance for the recently observed
slowdown in longevity improvements. The mortality assumptions have not been
updated for COVID-19 at this point as the impact on long-term mortality rates
for pension scheme members is not clear.
(f) Duration of defined benefit obligation
The graph below provides an illustration of the undiscounted expected benefit
payments included in the valuation of the principal plan obligations.
Undiscounted benefit payments (£m)
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
2022 2021
Weighted average duration years years
Current pensioner 11 14
Non-current pensioner 22 27
The weighted average duration is calculated based on discounted benefit
payments so is impacted by changes in the discount rate used (Refer Section
(e)).
(g) Risk
(g)(i) Risks and mitigating actions
The Group's consolidated statement of financial position is exposed to
movements in the defined benefit plans' net asset. In particular, the
consolidated statement of financial position could be materially sensitive to
reasonably likely movements in the principal assumptions for the principal
plan. By having offered post-retirement defined benefit pension plans the
Group is exposed to a number of risks. An explanation of the key risks and
mitigating actions in place for the principal plan is given below.
Asset volatility
Investment strategy risks include underperformance of the absolute return
strategy and underperformance of the liability hedging strategy. As the
trustees set investment strategy to protect their own view of plan strength
(not the IAS 19 position), changes in the IAS 19 liabilities (e.g. due to
movements in corporate bond prices) may not always result in a similar
movement in plan assets.
Failure of the asset strategy to keep pace with changes in plan liabilities
would expose the plan to the risk of a deficit developing, which could
increase funding requirements for the Group. abrdn and the trustees are
working together to determine the most appropriate de-risking strategy to best
protect against the risk that this plan strength deteriorates in the future.
Yields/discount rate
Falls in yields would in isolation be expected to increase the defined benefit
plan liabilities.
The principal plan uses both bonds and derivatives to hedge out yield risks on
the relevant plan basis in order to meet the trustee's objectives, rather than
the IAS 19 basis, which is expected to minimise the plan's need to rely on
support from the Group.
Inflation
Increases in inflation expectations would in isolation be expected to increase
the defined benefit plan liabilities.
The principal plan uses both bonds and derivatives to hedge out inflation
risks on the relevant plan basis in order to meet the objectives, rather than
the IAS 19 basis, which is expected to minimise the plan's need to rely on
support from the Group.
In the principal plan, pensions in payment are generally linked to CPI,
however inflationary risks are hedged using RPI instruments due to lack of
availability of CPI linked instruments. Therefore, the plan is exposed to
movements in the actual and expected long-term gap between RPI and CPI.
A House of Lords report in 2019 raised the potential for changes to the RPI
measure of inflation, which was followed by recommendations from the UK
Statistics Authority. The results of the consultation on the reform of RPI
(announced on 25 November 2020) confirmed that RPI will be aligned to CPIH
(CPI excluding owner occupiers' housing costs) as proposed, but not before
2030. While uncertainty remains, there is a risk that future cash flows from,
and thus the value of, the plan's RPI-linked assets fall without a
corresponding reduction in the plan's CPI-linked liabilities. While not
directly observable from market data, the plan's RPI-linked asset values may
already reflect an element of the expected changes and risk of such changes.
Life expectancy
Increases in life expectancy beyond those currently assumed will lead to an
increase in plan liabilities. Regular reviews of longevity assumptions are
performed to ensure assumptions remain appropriate.
Climate
The principal plan adopts a low-risk strategy to investment, with the majority
of plan assets invested in UK government bonds. The trustees have assessed the
principal plan's exposure to severe climate change as being minimal, as a
result of the low-risk investment strategy alongside the plan's strong funding
level.
(g)(ii) Sensitivity to key assumptions
The sensitivity of the principal plan's obligation and assets to the key
assumptions is disclosed below.
2022 2021
Change in assumption (Increase)/decrease Increase/(decrease) (Increase)/decrease Increase/(decrease)
in present value
in fair value of
in present value
in fair value of
of obligation
plan assets
of obligation
plan assets
£m £m £m £m
Yield/discount rate Decrease by 1% (e.g. from 4.85% to 3.85%) (341) 698 (735) 1,584
Increase by 1% 268 (525) 586 (1,185)
Rates of inflation Decrease by 1% 235 (445) 498 (1,029)
Increase by 1% (305) 591 (670) 1,402
Life expectancy Decrease by 1 year 60 N/A 99 N/A
Increase by 1 year (60) N/A (99) N/A
32. Deferred income
Where the Group receives fees in advance (front-end fees) for services it is
providing, including investment management services, these fees are initially
recognised as a deferred income liability and released to the consolidated
income statement over the period services are provided.
2022 2021
£m £m
At 1 January 5 73
Additions during the year 9 2
Released to the consolidated income statement as revenue from contracts with (11) (70)
customers
At 31 December 3 5
The amount of deferred income expected to be settled after more than 12 months
is £nil (2021: £nil).
Deferred income at 1 January 2021 included deferred income recognised in 2018
following the sale of the UK and European insurance business to Phoenix for
future services to be provided to Phoenix relating to certain client
propositions. As part of the simplification and extension of the strategic
partnership between the Group and Phoenix (refer Note 1(c)(iii)), in May 2021
the Group transferred workplace pensions marketing staff to Phoenix, who were
employed by the Group but provided services to Phoenix, and made an associated
payment of £32m to Phoenix. As a result, the Group released the related
deferred income of £57m in May 2021. The release of deferred income was
recognised in revenue from contracts with customers for the year ended 31
December 2021 in the consolidated income statement net of the £32m payment.
33. Other financial liabilities
2022 2021
Notes £m £m
Accruals 326 377
Amounts due to counterparties and customers for unsettled trades and fund 300 112
transactions(1)
Lease liabilities 16 224 225
Cash collateral held in respect of derivative contracts 35 109 15
Bank overdrafts 22 3 62
Contingent consideration liabilities 37 132 165
Outstanding contractual obligation for share buyback 24 - -
Other 104 90
Other financial liabilities 1,198 1,046
1. The 2021 figure was previously disclosed as creation of units awaiting
settlement (£107m) and outstanding purchases of investment securities (£5m).
The amount of other financial liabilities expected to be settled after more
than 12 months is £318m (2021: £303m).
34. Provisions and other liabilities
Provisions are obligations of the Group which are of uncertain timing or
amount. They are recognised when the Group has a present obligation as a
result of a past event, it is probable that a loss will be incurred in
settling the obligation and a reliable estimate of the amount can be made.
(a) Provisions
The movement in provisions during the year is as follows:
Separation costs Process execution Other provisions Total provisions
2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m
At 1 January 35 68 - - 14 25 49 93
Reclassified as held for sale during the year - - - - (2) - (2) -
Charged/(credited) to the consolidated income statement
Additional provisions - - 41 - 18 7 59 7
Release of unused provision - (25) - - (1) (1) (1) (26)
Used during the year (2) (8) - - (6) (17) (8) (25)
At 31 December 33 35 41 - 23 14 97 49
The provision for separation costs of £33m (2021: £35m) is for costs
expected to be incurred following the sale of the UK and European insurance
business to Phoenix. Our judgement is that a provision should be recognised
for costs for which the Group will not derive ongoing benefits such as those
relating to the de-coupling and decommissioning of systems and data but that a
provision should not be recognised for costs related to the development of
replacement systems and services as these will give future benefits. The main
uncertainty relating to the provision relates to the costs required to
complete the de-coupling of systems including amounts payable to Phoenix.
Following a reassessment of these costs during the year, less than £1m (2021:
£25m) was released from the provision. The remaining costs covered by the
provision are expected to be incurred in the next year.
The process execution provision of £41m relates to a payment required to
compensate an asset management client relating to the provision of certain
services. Subsequent to the year end the matter has been sufficiently
clarified such that the amount and timing are no longer uncertain. The Group
has in place liability insurance and expects to recover £36m being the cost
of the compensation, net of a £5m excess. No insurance recovery asset has
been recognised in these financial statements.
Other provisions primarily relates to restructuring and dilapidations on
leased properties. Restructuring provisions are generally expected to be
settled within 12 months. Dilapidations are generally expected to be settled
after more than 12 months. Refer Note 16 for further details of the Group's
leases.
The amount of provisions expected to be settled after more than 12 months is
£3m (2021: £10m).
(b) Other liabilities
As at 31 December 2022, other liabilities totalled £8m (2021: £8m). The
amount of other liabilities expected to be settled after more than 12 months
is £3m (2021: £3m).
35. Financial instruments risk management
(a) Overview
The principal risks and uncertainties that affect the Group's business model
and the Group's approach to risk management are set out in the Risk management
section of the Strategic report.
The Group's exposure to financial instrument risk is derived from the
financial instruments that it holds directly, the assets and liabilities of
the unit linked funds of the life operations of the Group and the Group's
defined benefit pension plans. In addition due to the nature of the business,
the Group's secondary exposure extends to the impact on investment management
and other fees that are determined on the basis of a percentage of AUMA and
are therefore impacted by financial risks borne by third party investors. In
this Note, exposures and sensitivities provided relate to the financial
instrument assets and liabilities, in scope of IFRS 7, to which the
shareholder is directly exposed.
For the purposes of this Note:
· Shareholder business refers to the assets and liabilities to which
the shareholder is directly exposed. The shareholder refers to the equity
holders of the Company.
· Unit linked funds refers to the assets and liabilities of the unit
linked funds of the life operations of the Group. It does not include the cash
flows (such as asset management charges or investment expenses) arising from
the unit linked fund contracts. These cash flows are included in shareholder
business.
· Third party interest in consolidated funds and non-controlling
interests refers to the assets and liabilities recorded on the Group's
consolidated statement of financial position which belong to third parties.
The Group controls the entities which own the assets and liabilities but the
Group does not own 100% of the equity or units of the relevant entities.
Unit linked funds are excluded from the analysis in this Note. Details
regarding the financial risks of instruments relating to the Group's unit
linked funds can be found in Note 23 and the risks relating to the Group's
principal defined benefit pension plan are explained in Note 31.
Third party interests in consolidated funds do not expose the shareholder to
market, credit or liquidity risk since the financial risks from the assets and
obligations are borne by third parties. As a result equity risk, interest rate
risk and credit risk quantitative disclosures in this Note exclude these
assets.
Under IFRS 7 the following financial instruments are excluded from scope:
· Interests in subsidiaries, associates and joint ventures.
· Rights and obligations arising from employee benefit plans.
· Insurance contracts as defined by IFRS 4.
· Share-based payment transactions.
For the purposes of managing risks to the Group's financial instrument assets
and liabilities, the Group considers the following categories:
Risk Definition and exposure
Market The risk of financial loss as a result of adverse financial market movements.
The shareholder is directly exposed to the impact of movements in equity
prices, interest rates and foreign exchange rates on the value of assets held
by the shareholder business.
Credit The risk of financial loss as a result of the failure of a counterparty,
issuer or borrower to meet their obligations or perform them in a timely
manner. The shareholder is directly exposed to credit risk from holding cash,
debt securities, derivative financial instruments and receivables and other
financial assets.
Liquidity The risk of financial loss as a result of being unable to settle financial
obligations when they fall due, as a result of having insufficient liquid
resources or being unable to realise investments and other assets other than
at excessive costs. The shareholder is directly exposed to the liquidity risk
from the shareholder business if it is unable to realise investments and other
assets in order to settle its financial obligations when they fall due, or can
do so only at excessive cost.
As set out in the Risk management section of the Strategic report, the Group
reviews and manages climate related risks. We continue to assess the potential
impacts on our business with a view to the resilience of our operations and
investment strategies. This is monitored through our climate risk and
opportunity radar to ensure we are well positioned to realise opportunities
and mitigate risks. Our day-to-day business is predominantly exposed to
transition risk as markets, policy, and reputations come to terms with
alignment to net zero. We have a critical role to play as stewards of clients
capital and this is reflected in our business strategy and our commitment to
reduce the carbon intensity of our portfolios and absolute emissions from our
direct operations. We have considered the implications of climate related
risk, including transition risks, for the 2022 financial statements, and have
concluded that there are no impacts on the valuation of the Group's assets and
liabilities including the valuation of financial instruments held at fair
value through profit or loss (in particular in relation to level 3
investments) or at amortised cost (in particular in relation to expected
credit losses).
(b) Market risk
The Group's largest exposure to market risk relates to our investments in
Phoenix, HDFC Life and HDFC Asset Management. Refer Sections (b)(i)(i) and
(b)(i)(iii) below for further details of the equity and foreign currency risks
on these investments.
Other market risk exposures primarily arise as a result of holdings in newly
established investment vehicles which the Group has seeded and co-investments
in property and infrastructure funds in the Investments segment. Seed capital
is classified as held for sale when it is the intention to dispose of the
vehicle in a single transaction and within one year. Co-investments are
typically held for a longer term and align the Group's economic interests with
those of property, private equity and infrastructure fund co-investors. The
consolidated statement of financial position includes the following amounts in
respect of seed capital and co-investments.
2022 2021
Notes £m £m
Equity securities and interests in pooled investment funds at FVTPL 213 239
Debt securities 76 76
Total seed capital 289 315
Equity securities and interests in pooled investment funds at FVTPL 107 96
Total co-investments 107 96
The Group sets limits for investing in seed capital and co-investment activity
and regularly monitors exposures arising from these investments. The Group
will consider hedging its exposure to market risk in respect of seed capital
investments where it is appropriate and efficient to do so. The Group will
also consider hedging its exposure to currency risk in respect of
co-investments where it is appropriate and efficient to do so. Other market
risks associated with co-investments are not hedged given the need for the
Group's economic interests to be aligned with those of the co-investors.
(b)(i) Elements of market risk
The main elements of market risk to which the Group is exposed are equity
risk, interest rate risk and foreign currency risk, which are discussed on the
following pages.
Information on the methods used to determine fair values for each major
category of financial instrument measured at fair value is presented in Note
37.
(b)(i)(i) Exposure to equity risk
The Group is exposed to the risk of adverse equity market movements which
could result in losses. This applies to daily changes in the market values and
returns on the holdings in equity securities.
At 31 December 2022 the shareholder exposure to equity markets was £1,577m
(2021: £2,584m) in relation to equity securities. This primarily relates to
the Group's investments in Phoenix of £634m (2021: £941m), HDFC Life of
£203m (2021: £508m) and HDFC Asset Management of £477m (2021: £840m), seed
capital investments of £171m (2021: £188m), and equity securities held by
the abrdn Financial Fairness Trust of £61m (2021: £69m).
The Group is also exposed to adverse market price movements on its interests
in pooled investment funds. The shareholder exposure of £268m (2021: £456m)
to pooled investment funds primarily relates to £149m (2021: £147m) of seed
capital and co-investments, corporate funds held in absolute return funds of
£50m (2021: £218m), investments in certain managed funds to hedge against
liabilities from variable pay awards that are deferred and settled in cash by
reference to the price of those funds of £37m (2021: £56m) and pooled
investment funds held by the abrdn Financial Fairness Trust of £25m (2021:
£31m).
The Equities and interests in pooled investment funds at FVTPL included in the
consolidated statement of financial position includes £188m (2021: £75m)
relating to third party interest in consolidated funds and non-controlling
interests - ordinary shares to which the shareholder is not exposed.
Exposures to equity risk are primarily managed though the hedging of market
risk in respect of seed capital investments where it is appropriate and
efficient to do so. Additionally limits are imposed on the amount of seed
capital and co-investment activity that may be undertaken. The Group does not
hedge equity risk in relation to its investments in Phoenix, HDFC Life and
HDFC Asset Management.
(b)(i)(ii) Exposure to interest rate risk
Interest rate risk is the risk that arises from exposures to changes in the
shape and level of yield curves which could result in losses due to the value
of financial assets and liabilities, or the cash flows relating to these,
fluctuating by different amounts.
The main financial assets held by the Group which give rise to interest rate
risk are debt securities and cash and cash equivalents. The Group is also
exposed to interest rate risk on its investments in pooled investment funds
where the underlying instruments are exposed to interest rate risk.
Interest rate exposures are managed in line with the Group's risk appetite.
(b)(i)(iii) Exposure to foreign currency risk
Foreign currency risk arises where adverse movements in currency exchange
rates impact the value of revenues received from, and the value of assets and
liabilities held in, currencies other than UK Sterling. The Group's financial
assets are generally held in the local currency of its operational geographic
locations. The Group generally does not hedge the currency exposure relating
to revenue and expenditure, nor does it hedge translation of overseas profits
in the income statement. Where appropriate, the Group may use derivative
contracts to reduce or eliminate currency risk arising from individual
transactions or seed capital and co-investment activity. The Group does not
hedge foreign exchange risk in relation to its investments in HDFC Life and
HDFC Asset Management.
The table below summarises the financial instrument exposure to foreign
currency risks in UK Sterling.
UK Indian Rupee Euro US Singapore Other Total
Sterling
Dollar
currencies
Dollar
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Notes £m £m £m £m £m £m £m £m £m £m £m £m £m £m
Financial assets 17 3,237 4,606 680 1,348 219 212 585 552 48 56 210 126 4,979 6,900
Financial liabilities 29 (1,202) (1,044) - - (53) (25) (776) (692) (8) (15) (23) (23) (2,062) (1,799)
Cash flow hedges (623) (554) - - - - 623 554 - - - - - -
Non- designated derivatives 296 330 - (1) (68) (79) (182) (203) - (1) (46) (46) - -
1,708 3,338 680 1,347 98 108 250 211 40 40 141 57 2,917 5,101
The Indian Rupee exposure primarily relates to the Group's investments in HDFC
Life and HDFC Asset Management. Other currencies include assets of £85m
(2021: £8m) and liabilities of £1m (2021: liabilities of £1m) in relation
to the fair value of derivatives used to manage currency risk.
On 18 October 2017, the Group issued US dollar subordinated notes with a
principal amount of US$750m. The related cash flows expose the Group to
foreign currency risk on the principal and coupons payable. The Group manages
the foreign exchange risk with a cross-currency swap which is designated as a
cash flow hedge.
Non-designated derivatives relate to foreign exchange forward contracts that
are not designated as cash flow hedges or net investment hedges and primarily
relate to the management of currency risk arising from seed capital and
co-investment activity.
In addition to financial instruments analysed above, the principal source of
foreign currency risk for shareholders arises from the Group's investments in
overseas subsidiaries and associates and joint ventures accounted for using
the equity method. The carrying value of the Group's Chinese joint venture is
disclosed in Note 14. The Group does not hedge foreign currency risk in
relation to these investments.
(b)(ii) Sensitivity of financial instruments to market risk analysis
The Group's profit/loss after tax and equity are sensitive to variations in
respect of the Group's market risk exposures and a sensitivity analysis is
presented below. The analysis has been performed by calculating the
sensitivity of loss after tax and equity to changes in equity security prices
(equity risk), changes in interest rates (interest rate risk) and changes in
foreign exchange rate (foreign currency risk) as at the reporting date applied
to assets and liabilities other than those classified as held for sale, and
after allowing for the Group's hedging strategy.
The variables used in the sensitivity analysis are considered reasonable
assumptions and are consistent with market peers. Changes to variables are
provided by internal specialists who determine what are reasonable
assumptions.
Profit/loss after tax and equity sensitivity to market risk
31 December 2022 31 December 2021
A reasonable change in the variable within the next calendar year Increase/(decrease) in A reasonable change in the variable within the next calendar year Increase/(decrease) in post-tax profit
post-tax profit
% £m % £m
Equity prices Increase 10 148 10 246
Decrease 10 (148) 10 (246)
Indian Rupee against Sterling Strengthen 10 70 10 139
Weaken 10 (57) 10 (114)
US Dollar against Sterling Strengthen 10 14 10 22
Weaken 10 (11) 10 (18)
Euro against Sterling Strengthen 10 11 10 12
Weaken 10 (9) 10 (10)
The equity prices sensitivities primarily relate to the Group's investments in
HDFC Life, HDFC Asset Management and Phoenix. The Indian Rupee sensitivities
primarily relate to the Group's investments in HDFC Life and HDFC Asset
Management.
The reasonable change in variables have no impact on any other components of
equity. These sensitivities concern only the impact on financial instruments
and exclude indirect impacts of the variable on fee income and certain costs
which may be affected by the changes in market conditions.
Interest rate sensitivity to a reasonable change in the variable within the
next calendar year is not material in either 2022 or 2021.
Limitations
The sensitivity of the Group's profit after tax and equity may be non-linear
and larger or smaller impacts should not be derived from these results. The
sensitivities provided illustrate the impact of a reasonably possible change
in a single sensitivity factor, while the other sensitivity factors remain
unchanged. Correlations between the different risks and/or other factors may
mean that experience would differ from that expected if more than one risk
event occurred simultaneously.
(c) Credit risk
Exposures to credit risk and concentrations of credit risk are managed by
setting exposure limits for different types of financial instruments and
counterparties. The limits are established using the following controls:
Financial instrument with credit risk exposure Control
Cash and cash equivalents Maximum counterparty exposure limits are set with reference to internal credit
assessments.
Derivative financial instruments Maximum counterparty exposure limits, net of collateral, are set with
reference to internal credit assessments. The forms of collateral that may be
accepted are also specified and minimum transfer amounts in respect of
collateral transfers are documented.
Debt securities The Group's policy is to set exposure limits by name of issuer, sector and
credit rating.
Other financial instruments Appropriate limits are set for other financial instruments to which the Group
may have exposure at certain times.
Group Treasury perform central monitoring of exposures against limits and are
responsible for the escalation of any limit breaches to the Chief Risk
Officer.
Expected credit losses (ECL) are calculated on financial assets which are
measured at amortised cost.
Financial assets attract an ECL allowance equal to either:
12 month ECL (losses resulting from possible default within the next 12 No significant increase in credit risk since initial recognition.
months)
Trade receivables or contract assets with significant financing component, or
lease receivables if lifetime ECL measurement has not been elected.
Lifetime ECL (losses resulting from possible defaults over the remaining life Significant increase in credit risk since initial recognition.
of the financial asset)
Trade receivables or contract assets with no significant financing component.
Trade receivables or contract assets with significant financing component, or
lease receivables for which lifetime ECL measurement has been elected.
Changes in Lifetime ECL Credit-impaired at initial recognition.
In determining whether a default has taken place, or where there is an
increased risk of a default, a number of factors are taken into account
including a deterioration in the credit quality of a counterparty, the number
of days that a payment is past due, and specific events which could impact a
counterparty's ability to pay.
The Group assumes that a significant increase in credit risk has arisen when
contractual payments are more than 30 days past due. The Group assumes that
credit risk on a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to have low
credit risk at the reporting date. Financial instruments with an external
rating of 'investment grade' are presumed to have low credit risk in the
absence of evidence to the contrary. Investment grade financial instruments
are financial assets with credit ratings assigned by external rating agencies
with classification within the range of AAA to BBB. If a financial asset is
not rated by an external agency it is classified as 'not rated'.
The Group applies the simplified approach, as permitted under IFRS 9, to
calculate the ECL allowance for trade receivables and contract assets
including accrued income from contracts with customers and lease receivables.
Under the simplified approach, the ECL allowance is calculated over the
remaining life of the asset, using a provision matrix approach based on
historic observed default rates adjusted for knowledge of specific events
which could influence loss rates.
At 31 December 2022 the Group does not hold financial assets at amortised cost
that it regards as credit-impaired or for which it considers the probability
of default would result in material expected credit losses in its Investments
and Adviser segments. Historically, default levels have been insignificant for
the Group's customers within these segments. Trade debtors past due but not in
default at 31 December 2022 for these segments were £84m (2021: £77m) the
majority of which were less than 90 days past due (2021: less than 90 days).
Of amounts greater than 90 days at 31 December 2022, less than £19m had not
been received at the date of this report of which no single counterparty
represented more than £4m. The expected credit losses recognised were less
than £1m (2021: less than £1m). In making this assessment the Group has
considered if any evidence is available to indicate the occurrence of an event
which would result in a detrimental impact on the estimated future cash flows
of these assets.
With the acquisition of ii (refer Note 1(b)(i)), the Group is exposed to an
increased level of credit risk within its Personal segment. Trade debtors past
due for the Personal segment at 31 December 2022 were £5m (2021: less than
£1m), the majority of which were considered to be credit impaired. A lifetime
loss allowance of £3m (2021: less than £1m) has been recognised based on
expected recovery. This primarily relates to ii and is in line with the loss
allowance recognised at the date of acquisition.
(c)(i) Credit exposure
The following table presents an analysis of the credit quality of shareholder
financial assets and the maximum exposure to credit risk without taking into
account any collateral held.
Amortised cost
Fair value through profit or loss Cash flow hedge 12 month Lifetime ECL(1) Total
ECL
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m £m £m
AAA - - - - 89 134 - - 89 134
AA+ to AA- 164 241 - - 162 396 - - 326 637
A+ to A- 327 618 85 8 953 1,446 - - 1,365 2,072
BBB 76 82 - - 126 131 - - 202 213
BB - - - - - - - 6 - 6
Not rated 21 32 - - 429 241 463 418 913 691
Gross carrying amount 588 973 85 8 1,759 2,348 463 424 2,895 3,753
Loss allowance - - - - - - (3) - (3) -
Carrying amount 588 973 85 8 1,759 2,348 460 424 2,892 3,753
Derivative financial assets 19 6 85 8 - - - - 104 14
Debt securities 550 936 - - 210 221 - 5 760 1,162
Receivables and other financial assets 19 31 - - 428 231 460 418 907 680
Cash and cash equivalents - - - - 1,121 1,896 - 1 1,121 1,897
Carrying amount 588 973 85 8 1,759 2,348 460 424 2,892 3,753
1. As noted in Section (c) above, Lifetime ECL balances include trade
debtors with a gross carrying value of £5m (2021: £nil) which are credit
impaired for which a loss allowance of £3m (2021: £nil) has been recognised.
All other Lifetime ECL balances are not credit impaired.
In the table above debt securities exclude debt securities relating to third
party interests in consolidated funds of £42m (2021: £25m). Cash and cash
equivalents exclude cash and cash equivalents relating to third party
interests in consolidated funds of £12m (2021: £7m). The shareholder is not
exposed to the credit risk in respect of third party interests in consolidated
funds since the financial risk of the assets are borne by third parties.
(c)(ii) Collateral accepted and pledged in respect of financial instruments
Collateral in respect of bilateral over-the-counter (OTC) derivative financial
instruments and bilateral repurchase agreements is accepted from and provided
to certain market counterparties to mitigate counterparty risk in the event of
default. The use of collateral in respect of these instruments is governed by
formal bilateral agreements between the parties. For OTC derivatives the
amount of collateral required by either party is determined by the daily
bilateral OTC exposure calculations in accordance with these agreements and
collateral is moved on a daily basis to ensure there is full
collateralisation. Under the terms of these agreements, collateral is posted
with the ownership captured under title transfer of the contract. With regard
to either collateral pledged or accepted, the Group may request the return of,
or be required to return, collateral to the extent it differs from that
required under the daily bilateral OTC exposure calculations.
Where there is an event of default under the terms of the agreements, any
collateral balances will be included in the close-out calculation of net
counterparty exposure. At 31 December 2022, the Group had pledged £14m (2021:
£26m) of cash and £nil (2021: £nil) of securities as collateral for
derivative financial liabilities. At 31 December 2022, the Group had accepted
£109m (2021: £15m) of cash and £nil (2021: £50m) of securities as
collateral for derivatives financial assets and reverse repurchase agreements.
None of the securities were sold or repledged at the year end.
(c)(iii) Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount reported on the
consolidated statement of financial position only when there is a legally
enforceable right to offset the recognised amounts and there is an intention
to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
The Group does not offset financial assets and liabilities on the consolidated
statement of financial position, as there are no unconditional rights to set
off. Consequently, the gross amount of other financial instruments presented
on the consolidated statement of financial position is the net amount. The
Group's bilateral OTC derivatives are all subject to an International Swaps
and Derivative Association (ISDA) master agreement. ISDA master agreements and
reverse repurchase agreements entered into by the Group are considered master
netting agreements as they provide a right of set off that is enforceable only
in the event of default, insolvency, or bankruptcy.
The Group does not hold any other financial instruments which are subject to
master netting agreements or similar arrangements.
The following table presents the effect of master netting agreements and
similar arrangements.
Related amounts not offset on the consolidated
statement of financial position
Gross amounts of financial instruments as presented on the consolidated Financial Financial collateral pledged/(received) Net position
statement of financial position
instruments
2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m
Financial assets
Derivatives(1) 102 8 (1) - (100) (8) 1 -
Reverse repurchase agreements - 50 - - - (50) - -
Total financial assets 102 58 (1) - (100) (58) 1 -
Financial liabilities
Derivatives(1) (1) (2) 1 - - - - (2)
Total financial liabilities (1) (2) 1 - - - - (2)
1. Only OTC derivatives subject to master netting agreements have been
included above.
(d) Liquidity risk
The shareholder is exposed to liquidity risk if the Group is unable to realise
investments and other assets in order to settle its financial obligations when
they fall due, or can do so only at excessive cost. The following quantitative
liquidity risk disclosures are provided in respect of these financial
liabilities.
The Group has a liquidity risk framework and processes in place for
monitoring, assessing, and managing liquidity risk.
This framework ensures that liquidity risks are identified across the Group
and, where relevant, mitigation measures are put in place. Stress testing of
the residual risks is performed to understand the quantum of risk under stress
conditions. This then informs the level of liquid resources that need to be
maintained. Where appropriate, this is enhanced with external credit
facilities and the Group has a syndicated revolving credit facility of £400m
which was undrawn at 31 December 2022.
The level of liquid resources in the Group is also projected under a number of
adverse scenarios. These are described more fully in the Viability Statement.
A contingency funding plan is maintained to ensure that if liquidity risk did
materialise, processes and procedures are already in place to assist with
resolving the issue. Regular monitoring of liquid resources is performed and
projections undertaken (under both base and stressed conditions) to understand
the outlook.
As a result of the policies and processes established to manage risk, the
Group expects to be able to manage liquidity risk on an ongoing basis. We
recognise there are a number of scenarios that can impact the liquid resources
of a business as discussed in the Risk management section of the Strategic
report.
(d)(i) Maturity analysis
The analysis that follows presents the undiscounted cash flows payable under
contractual maturity at the reporting date for all financial liabilities,
other than those related to unit linked funds which are discussed in Note 23.
Within 1-5 5-10 10-15 15-20 Greater than Total
1 year
years
years
years
years
20 years
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m £m £m £m £m £m £m
Subordinated liabilities 24 29 94 114 577 627 - 26 - 26 - 97 695 919
Other financial liabilities 891 701 198 244 105 93 48 40 6 - 15 - 1,263 1,078
Total 915 730 292 358 682 720 48 66 6 26 15 97 1,958 1,997
Refer Note 18 for the maturity profile of undiscounted cash flows of
derivative financial instruments.
The Group also had unrecognised commitments in respect of financial
instruments as at 31 December 2022 (refer Note 40) with a contractual maturity
of within one year, between one and five years and over five years of £3m,
£32m and £37m respectively (2021: £35m, £7m and £63m). The commitments
may generally be requested anytime up to the contractual maturity.
36. Structured entities
A structured entity is an entity that is structured in such a way that voting
or similar rights are not the dominant factor in deciding who controls the
entity. The Group has interests in structured entities through investments in
a range of investment vehicles including:
· Pooled investment funds managed internally and externally, including
OEICs, SICAVs, unit trusts and limited partnerships.
· Debt securitisation vehicles which issue asset-backed securities.
The Group consolidates structured entities which it controls. Where the Group
has an investment in, but not control over these types of entities, the
investment is classified as an investment in associate when the Group has
significant influence. Investments in associates at FVTPL are included in
equity securities and pooled investment funds in the analysis of financial
investments.
The Group also has interests in structured entities through asset management
fees and other fees received from these entities.
(a) Consolidated structured entities
As at 31 December 2022 and 31 December 2021, the Group has not provided any
non-contractual financial or other support to any consolidated structured
entity and there are no current intentions to do so.
(b) Unconsolidated structured entities
As at 31 December 2022 and 31 December 2021, the Group has not provided any
non-contractual financial or other support to any unconsolidated structured
entities and there are no current intentions to do so.
The following table shows the carrying value of the Group's interests in
unconsolidated structured entities by line item in the consolidated statement
of financial position.
2022 2021
£m £m
Financial investments
Equity securities and interests in pooled investment funds 558 851
Debt securities - 36
Total financial investments 558 887
Receivables and other financial assets 215 244
Other financial liabilities 95 121
The Group's exposure to loss in respect of unconsolidated structured entities
is limited to the carrying value of the Group's investment in these entities
and the loss of future asset management and other fees received by the Group
for the management of these entities. Exposure to loss arising from market and
credit risk in relation to investments held in the unit linked funds and
relating to third party interest in consolidated funds and non-controlling
interests - ordinary shares is not borne by the shareholder.
Additional information on the Group's exposure to financial risk and the
management of these risks can be found in Note 23 and Note 35.
The total assets under management of unconsolidated structured entities are
£126,019m at 31 December 2022 (2021: £135,007m). The fees recognised in
respect of these assets under management during the year to 31 December 2022
were £566m (2021: £670m).
As at 31 December 2022, the Group had no investments in unconsolidated
structured debt securitisation vehicles. The total issuance balance relating
to unconsolidated structured debt securitisation vehicles in which the Group
is invested as at 31 December 2021 was £1,741m.
37. Fair value of assets and liabilities
The Group uses fair value to measure many of its assets and liabilities. Fair
value is the amount for which an asset could be exchanged, or a liability
settled, between knowledgeable willing parties in an arm's length transaction.
An analysis of the Group's financial assets and financial liabilities in
accordance with the categories of financial instrument set out in IFRS 9
Financial Instruments is presented in Notes 17, 23 and 29 and includes those
financial assets and liabilities held at fair value.
(a) Fair value hierarchy
In determining fair value, the following fair value hierarchy categorisation
has been used:
· Level 1: Fair values measured using quoted prices (unadjusted) in
active markets for identical assets or liabilities. An active market exists
where transactions take place with sufficient frequency and volume to provide
pricing information on an ongoing basis.
· Level 2: Fair values measured using inputs other than quoted prices
included within level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
· Level 3: Fair values measured using inputs that are not based on
observable market data (unobservable inputs).
Information on the methods and assumptions used to determine fair values for
equity securities and interests in pooled investment funds, debt securities
and derivatives measured at fair value is given below:
Equities and interests in pooled investment funds(1,2) Debt securities Derivatives(3)
Level 1 Equity instruments listed on a recognised exchange valued using prices sourced Debt securities listed on a recognised exchange valued using prices sourced Exchange traded derivatives valued using prices sourced from the relevant
from their primary exchange. from their primary exchange. exchange.
Level 2 Pooled investment funds where daily unit prices are available and reference is Debt securities valued using prices received from external pricing providers Over-the-counter derivatives measured using a range of valuation models
made to observable market data. based on quotes received from a number of market participants. including discounting future cash flows and option valuation techniques.
Debt securities valued using models and standard valuation formulas based on
observable market data(4).
Level 3 These relate primarily to interests in private equity, real estate and Debt securities valued using prices received from external pricing providers N/A
infrastructure funds which are valued at net asset value. Underlying real based on a single broker indicative quote.
estate and private equity investments are generally valued in accordance with
independent professional valuation reports or International Private Equity and
Venture Capital Valuation Guidelines where relevant. The underlying
investments in infrastructure funds are generally valued based on the phase of Debt securities valued using models and standard valuation formulas based on
individual projects forming the overall investment and discounted cash flow unobservable market data(4).
techniques based on project earnings.
Where net asset values are not available at the same date as the reporting
date, these valuations are reviewed and, where appropriate, adjustments are
made to reflect the impact of changes in market conditions between the date of
the valuation and the end of the reporting period.
Other unlisted equity securities are generally valued at indicative share
prices from off market transactions.
1. Investments in associates at FVTPL are valued in the same manner as the
Group's equity securities and interests in pooled investment funds.
2. Where pooled investment funds have been seeded and the investment in the
funds have been classified as held for sale, the costs to sell are assumed to
be negligible. The fair value of pooled investment funds held for sale is
calculated as equal to the observable unit price.
3. Non-performance risk arising from the credit risk of each counterparty is
also considered on a net exposure basis in line with the Group's risk
management policies. At 31 December 2022 and 31 December 2021, the residual
credit risk is considered immaterial and no credit risk adjustment has been
made.
4. If prices are not available from the external pricing providers or are
considered to be stale, the Group has established procedures to arrive at an
internal assessment of the fair value.
The fair value of liabilities in respect of third party interest in
consolidated funds and non-participating investment contracts are calculated
equal to the fair value of the underlying assets and liabilities.
Thus, the value of these liabilities is dependent on the methods and
assumptions set out above in relation to the underlying assets and
liabilities:
· For third party interest in consolidated funds, when the underlying
assets and liabilities are valued using readily available market information
the liabilities in respect of third party interest in consolidated funds are
treated as level 2. Where the underlying assets and liabilities are not valued
using readily available market information the liabilities in respect of third
party interest in consolidated funds are treated as level 3.
· For non-participating investment contracts, the underlying assets and
liabilities are predominately categorised as level 1 or 2 and as such, the
inputs into the valuation of the liabilities are observable and these
liabilities are predominately categorised within level 2 of the fair value
hierarchy. Where the underlying assets are categorised as level 3, the
liabilities are also categorised as level 3.
In addition, contingent consideration assets and contingent consideration
liabilities are also categorised as level 3 in the fair value hierarchy.
Contingent consideration assets and liabilities have been recognised in
respect of acquisitions and disposals. Generally valuations are based on
unobservable assumptions regarding the probability weighted cash flows and,
where relevant, discount rate.
(a)(i) Fair value hierarchy for assets measured at fair value in the statement of financial position
The table below presents the Group's non-unit linked assets measured at fair
value by level of the fair value hierarchy (refer Note 23 for fair value
analysis in relation to assets backing unit linked liabilities).
Fair value hierarchy
Total Level 1 Level 2 Level 3
2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m
Owner occupied property 1 1 - - - - 1 1
Derivative financial assets 104 14 3 - 101 14 - -
Equity securities and interests in pooled investment vehicles(1) 2,033 3,115 1,621 2,600 181 409 231 106
Debt securities 592 961 2 1 588 959 2 1
Contingent consideration assets 19 31 - - - - 19 31
Total assets at fair value 2,749 4,122 1,626 2,601 870 1,382 253 139
1. Includes £634m (2021: £941m), £477m (2021: £840m) and £203m (2021:
£508m) for the Group's listed equity investments in Phoenix, HDFC Asset
Management and HDFC Life respectively, which are classified as significant
listed investments (refer Note 11).
There were no significant transfers from level 1 to level 2 during the year
ended 31 December 2022 (2021: none). There were also no significant transfers
from level 2 to level 1 during the year ended 31 December 2022 (2021: none).
Transfers generally relate to assets where changes in the frequency of
observable market transactions resulted in a change in whether the market was
considered active and are deemed to have occurred at the end of the calendar
quarter in which they arose.
Refer Section (a)(iii) below for details of movements in level 3.
(a)(ii) Fair value hierarchy for liabilities measured at fair value in the statement of financial position
The table below presents the Group's non-unit linked liabilities measured at
fair value by level of the fair value hierarchy.
Fair value hierarchy
Total Level 1 Level 2 Level 3
2022 2021 2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m £m £m
Liabilities in respect of third party interest in consolidated funds 242 104 - - 242 104 - -
Derivative financial liabilities 1 5 - 3 1 2 - -
Contingent consideration liabilities 132 165 - - - - 132 165
Other financial liabilities(1) 11 - - - - - 11 -
Total liabilities at fair value 386 274 - 3 243 106 143 165
1. Excluding contingent consideration liabilities.
There were no significant transfers between levels 1 and 2 during the year
(2021: none). Refer Section (a)(iii) below for details of movements in level
3.
(a)(iii) Reconciliation of movements in level 3 instruments
The movements during the year of level 3 assets and liabilities held at fair
value, excluding unit linked assets and liabilities and assets and liabilities
held for sale, are analysed below.
Owner occupied property Equity securities Debt securities
and interests in
pooled investment
funds
2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m
At 1 January 1 1 106 101 1 1
Total gains recognised in the consolidated income statement - - 2 8 (2) -
Purchases - - 139 24 3 -
Sales and other adjustments - - (16) (27) - -
Transfers in to level 3(1) - - - - - -
At 31 December 1 1 231 106 2 1
1. Transfers are deemed to have occurred at the end of the calendar quarter
in which they arose.
Contingent Contingent Other financial liabilities(1)
consideration assets
consideration liabilities
2022 2021 2022 2021 2022 2021
£m £m £m £m £m £m
At 1 January 31 28 (165) (6) - -
Total amounts recognised in the consolidated income statement 3 - 32 (3) (11) -
Additions 1 31 (6) (155) - -
Settlements (18) (34) 7 8 - -
Other movements 2 (3) - - - -
Transfer to contingent consideration liability - 9 - (9) - -
At 31 December 19 31 (132) (165) (11) -
1. Excluding contingent consideration liabilities.
The significant additions in the year ended 31 December 2021 primarily related
to the disposals of Parmenion and Bonaccord and the acquisition of Tritax.
Refer Note 1 for further details.
For the year ended 31 December 2022, gains of £24m (2021: gains of £5m) were
recognised in the consolidated income statement in respect of non-unit linked
assets and liabilities held at fair value classified as level 3 at the year
end, excluding assets and liabilities held for sale. Of this amount, gains of
£24m (2021: gains of £5m) were recognised in Net gains or losses on
financial instruments and other income.
Transfers of equity securities and interests in pooled investment funds and
debt securities into level 3 generally arise when external pricing providers
stop providing a price or where the price provided is considered stale.
Transfers of equity securities and interests in pooled investment funds and
debt securities out of level 3 arise when acceptable prices become available
from external pricing providers.
(a)(iv) Significant unobservable inputs in level 3 instrument valuations
The table below identifies the significant unobservable inputs in relation to
equity securities and interests in pooled investment funds categorised as
level 3 instruments at 31 December 202 2 with a fair value of £231m (202 1:
£106m).
Fair value
2022 2021 Valuation technique Unobservable input Range (weighted average)
£m £m
Private equity, real estate and infrastructure funds 219 91 Net asset value Net asset value statements provided for a large number of funds including A range of unobservable inputs is not applicable as we have determined that
seven significant funds (fair value >£5m). the reported NAV represents fair value at the end of the reporting period.
Other unlisted equity securities 12 15 Indicative share price Recent off market capital raising transactions. A range of unobservable inputs is not applicable as we have determined that
the indicative share price from off market transactions represents fair value
at the end of the reporting period.
The table below identifies the significant unobservable inputs in relation to
contingent consideration assets and liabilities and other financial instrument
liabilities categorised as level 3 instruments at 31 December 2022 with a fair
value of (£124m) (2021: (£134m)).
Fair value
2022 2021
£m £m Valuation technique Unobservable input Input used
Contingent consideration assets and liabilities and other financial instrument (124) (134) Probability weighted cash flow and where applicable discount rates Unobservable inputs relate to probability weighted cash flows and, where
liabilities relevant, discount rates.
The most significant unobservable inputs relate to assumptions used to value
the contingent consideration liability related to the acquisition of Tritax of
£112m (2021: £156m). For Tritax a number of scenarios were prepared, around
a base case, with probabilities assigned to each scenario (based on an The base scenario for Tritax contingent consideration used a revenue compound
assessment of the likelihood of each scenario). The value of the contingent annual growth rate (CAGR) from 31 March 2022 to 31 March 2026 of 14% (2021:
consideration was determined for each scenario, and these were then CAGR from 31 March 2021 to 31 March 2026 of 21%) with other scenarios using a
probability weighted, with this probability weighted valuation then discounted range of revenue growth rates around this base. The base scenario used a
from the payment date to the balance sheet date. It was assumed that the cost/income ratio of c52% (2021: c50%) with other scenarios using a range of
timing of the exercise of the earn out put options between 2024, 2025 and 2026 cost/income ratios around this base.
(refer Note 1(b)(ii)) would be that which is most beneficial to the holders of
the put options. The risk adjusted contingent consideration cash flows have been discounted
using a primary discount rate of 4.5% (2021: 1.9%).
(a)(v) Sensitivity of the fair value of level 3 instruments to changes in key assumptions
At 31 December 2022 the shareholder is directly exposed to movements in the
value of all non-unit linked level 3 instruments. No level 3 instruments are
held in consolidated structured entities. See Note 23 for unit linked level 3
instruments.
Sensitivities for material level 3 assets and liabilities are provided below.
Changing unobservable inputs in the measurement of the fair value of the other
level 3 financial assets and financial liabilities to reasonably possible
alternative assumptions would not have a significant impact on loss
attributable to equity holders or on total assets.
(a)(v)(i) Equity securities and interests in pooled investment funds
As noted above, of the level 3 equity securities and interests in pooled
investment funds, £219m relates to private equity, real estate and
infrastructure funds (2021: £91m) which are valued using net asset value
statements. A 10% increase or decrease in the net asset value of these
investments would increase or decrease the fair value of the investments by
£22m (2021: £9m).
(a)(v)(ii) Contingent consideration assets and liabilities and other financial instrument liabilities
As noted above, the most significant unobservable inputs for level 3
instruments relate to assumptions used to value the contingent consideration
related to the purchase of Tritax. Sensitivities for reasonably possible
changes to key assumptions are provided in the table below.
Assumption Change in assumption Consequential increase/(decrease) in contingent consideration liability
2022
£m
Revenue compound annual growth rate (CAGR) from 31 March 2022 to 31 March 2026 Decreased by 10% (43)
Increased by 10% 40
Cost/income ratio Decreased by 5% 13
Increased by 5% (14)
Discount rate Decreased by 2% 7
Increased by 2% (6)
(b) Assets and liabilities not carried at fair value
The table below presents estimated fair values by level of the fair value
hierarchy of non-unit linked financial assets and liabilities whose carrying
value does not approximate fair value. Fair values of assets and liabilities
are based on observable market inputs where available, or are estimated using
other valuation techniques.
As recognised in the consolidated statement of financial position line item Fair value Level 1 Level 2 Level 3
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Notes £m £m £m £m £m £m £m £m £m £m
Assets
Debt securities 210 226 211 230 - 12 210 218 1 -
Liabilities
Subordinated liabilities 30 621 644 550 683 - - 550 683 - -
The estimated fair values for subordinated liabilities are based on the quoted
market offer price.
The carrying value of all other financial assets and liabilities measured at
amortised cost approximates their fair value.
38. Statement of cash flows
The Group classifies cash flows in the consolidated statement of cash flows as
arising from operating, investing or financing activities.
Cash flows are classified based on the nature of the activity to which they
relate and with consideration to generally accepted presentation adopted by
peers. For activities related to asset management business, cash flows arising
from the sale and purchase of debt securities and equity securities and
interests in pooled investment funds, with the exception of those related to
unit linked funds, are classified as cash flows arising from investing
activities. For activities related to insurance business, including those
related to unit linked funds, cash flows arising from the sale and purchase of
debt securities and equity securities and interests in pooled investment funds
are classified as cash flows arising from operating activities.
For activities related to the acquisition and disposal of subsidiaries,
associates and joint ventures, cash flows are classified as investing
activities. The settlement of contingent and deferred amounts recognised on
acquisitions and disposals are classified as investing activities where there
is not considered to be a significant financing component of the related
inflows or outflows.
Purchases and sales of financial investments are presented on a gross basis
except for purchases and sales of short-term instruments held in consolidated
liquidity funds which are presented on a net basis.
Dividends received from associates and joint ventures are presented as cash
flows arising from operating activities.
Movements in cash collateral held in relation to derivative contracts hedging
subordinated debt are presented as cash flows arising from financing
activities.
The tables below provide further analysis of the balances in the consolidated
statement of cash flows.
(a) Change in operating assets
2022 2021
£m £m
Equity securities and interests in pooled investment funds 680 137
Debt securities 89 23
Derivative financial instruments (11) 9
Receivables and other financial assets and other assets 174 26
Assets held for sale (16) 19
Change in operating assets 916 214
Change in operating assets includes related non-cash items.
(b) Change in operating liabilities
2022 2021
£m £m
Other financial liabilities, provisions and other liabilities (180) (128)
Pension and other post-retirement benefit provisions (44) (31)
Deferred income 1 (68)
Investment contract liabilities (315) 46
Change in liability for third party interest in consolidated funds (196) (17)
Liabilities held for sale 9 (11)
Change in operating liabilities (725) (209)
Change in operating liabilities includes related non-cash items.
(c) Other non-cash and non-operating items
2022 2021
£m £m
Gain on sale of subsidiaries and other operations - (127)
Profit on disposal of interests in associates (6) (1,236)
Loss on disposal of property, plant and equipment 7 (4)
Depreciation of property, plant and equipment 39 39
Amortisation of intangible assets 129 108
Impairment losses on intangible assets 369 8
Loss on impairment of associates 9 -
Impairment losses recognised on property, plant and equipment 7 15
Impairment losses on disposal group held for sale - -
Movement in contingent consideration assets/liabilities (35) 3
Equity settled share-based payments 24 43
Finance costs 29 30
Share of profit or loss from associates and joint ventures accounted for using (2) 22
the equity method
Other non-cash and non-operating items 570 (1,099)
(d) Disposal of subsidiaries and other operations
2021(1)
Notes £m
Equity securities and interests in pooled investment funds 15
Other assets of operations disposed of 34
Other liabilities of operations disposed of (18)
Net assets disposed of 31
Items transferred to profit or loss on disposal of subsidiaries 1 (1)
Fair value of earn-out payments and retained interest (32)
Other non-cash consideration (9)
Gain on sale 1 127
Transaction costs 7
Total cash consideration 123
Cash and cash equivalents disposed of (11)
Cash inflow from disposal of subsidiary 112
1. Relates to the number of 2021 disposals. Refer Note 1(c)(i) for further
details.
There were no operations disposed of in the year ended 31 December 2022.
(e) Movement in subordinated liabilities
The following table reconciles the movement in subordinated liabilities in the
year, split between cash and non-cash items.
2022 2021
£m £m
At 1 January 644 638
Cash flows from financing activities
Repayment of subordinated liabilities (92) -
Interest paid(1) (31) (28)
Cash flows from financing activities (123) (28)
Non-cash items
Interest expense 30 28
Foreign exchange adjustment 70 6
At 31 December 621 644
1. Interest paid on subordinated liabilities and other equity in the
consolidated statement of cash flows of £34m (2021: £28m) includes an inflow
of £8m (2021: £nil) in relation to the related cash flow hedge (refer Note
18) and an outflow of £11m (2021: £nil) in relation to other equity (refer
Note 28) . Other movements in the fair value of the cash flow hedge relate to
non-cash movements. Cash collateral held in respect of derivative contracts of
£109m (2021: £15m) in Other financial liabilities (refer Note 33) includes
collateral held in respect of the cash flow hedge of £89m (2021: £15m).
(f) Movement in lease liabilities
The following table reconciles the movement in lease liabilities in the year,
split between cash and non-cash items.
2022 2021
£m £m
At 1 January 225 249
Cash flows from financing activities
Payment of lease liabilities - principal (46) (27)
Payment of lease liabilities - interest (6) (6)
Cash flows from financing activities (52) (33)
Non-cash items
Additions 46 6
Disposals and adjustments (8) (3)
Interest capitalised 6 6
Foreign exchange adjustment 7 -
At 31 December 224 225
39. Contingent liabilities and contingent assets
Contingent liabilities are possible obligations of the Group of which timing
and amount are subject to significant uncertainty. Contingent liabilities are
not recognised on the consolidated statement of financial position but are
disclosed, unless they are considered remote. If such an obligation becomes
probable and the amount can be measured reliably it is no longer considered
contingent and is recognised as a liability.
Conversely, contingent assets are possible benefits to the Group. Contingent
assets are only disclosed if it is probable that the Group will receive the
benefit. If such a benefit becomes virtually certain it is no longer
considered contingent and is recognised as an asset.
Legal proceedings, complaints and regulations
The Group is subject to regulation in all of the territories in which it
operates investment management and insurance businesses. In the UK, where the
Group primarily operates, the FCA has broad powers, including powers to
investigate marketing and sales practices.
The Group, like other financial organisations, is subject to legal
proceedings, complaints and regulatory discussions, reviews and challenges in
the normal course of its business. All such material matters are periodically
reassessed, with the assistance of external professional advisers where
appropriate, to determine the likelihood of the Group incurring a liability.
Where it is concluded that it is more likely than not that a material outflow
will be made a provision is established based on management's best estimate of
the amount that will be payable. At 31 December 2022, there are no identified
contingent liabilities expected to lead to a material exposure.
40. Commitments
The Group has contractual commitments in respect of expenditure on investment
property, funding arrangements and leases which will be payable in future
periods. These commitments are not recognised on the Group's statement of
financial position at the year end but are disclosed to give an indication of
the Group's future committed cash flows.
(a) Unrecognised financial instruments
As at 31 December 2022, the Group has committed to investing an additional
£72m (2021: £105m) into funds in which it holds a co-investment interest.
(b) Capital commitments
As at 31 December 2022, the Group has capital commitments other than in
relation to financial instruments of £2m (2021: £2m). In addition,
commitments relating to future acquisitions are disclosed in Note 1(c)(iii).
41. Employee share-based payments and deferred fund awards
The Group operates share incentive plans for its employees. These generally
take the form of an award of options, conditional awards or restricted shares
in abrdn plc (equity-settled share-based payments) but can also take the form
of a cash award based on the share price of abrdn plc (cash-settled
share-based payments). The Group also incentivises certain employees through
the award of units in Group managed funds (deferred fund awards) which are
cash-settled. All the Group's incentive plans have conditions attached before
the employee becomes entitled to the award. These can be performance and/or
service conditions (vesting conditions) or the requirement of employees to
save in the save-as-you-earn scheme (non-vesting condition). The period over
which all vesting conditions are satisfied is the vesting period and the
awards vest at the end of this period.
For all share-based payments services received for the incentive granted are
measured at fair value.
For equity-settled share-based payment transactions, the fair value of
services received is measured by reference to the fair value of the equity
instruments at the grant date. The fair value of the number of instruments
expected to vest is charged to the income statement over the vesting period
with a corresponding credit to the equity compensation reserve in equity.
At each period end the Group reassesses the number of equity instruments
expected to vest and recognises any difference between the revised and
original estimate in the consolidated income statement with a corresponding
adjustment to the equity compensation reserve.
At the time the equity instruments vest, the amount recognised in the equity
compensation reserve in respect of those equity instruments is transferred to
retained earnings.
For cash-settled share-based payment and deferred fund awards transactions,
services received are measured at the fair value of the liability. The fair
value of the liability is remeasured at each reporting date and any changes in
fair value are recognised in the consolidated income statement.
The following plans made awards during the year ended 31 December 2022:
Plan Options Conditional awards Restricted shares Typical vesting period (years) Contractual life for options Recipients Conditions which must be met prior to vesting
abrdn plc Deferred Share Plan/ Discretionary Share Plan/Executive LTIP Plan(1) Yes Yes No 1-3 years Up to 10 years from date of grant Executives and senior management Service, or service and performance conditions. These can be tailored to the
(3 years for Executive LTIP) individual award.
Sharesave (Save-as-you-earn) Yes No No 3 or 5 Up to six months after vesting UK and Irish employees Service only
Share incentive plan No No Yes 3 years Not applicable UK and Irish employees Service only
1. Included in Deferred and discretionary share plans in Section (b)(i)
below.
All of the awards made under these plans are equity-settled except for a small
number of cash-settled awards for the deferred and discretionary share plans
(see Section (d)(ii) below).
The fair value of awards granted under the Group's incentive schemes is
determined using a relevant valuation technique, such as the Black Scholes
option pricing model.
The awards made under the deferred and discretionary share plans include
awards for deferred bonuses of the prior year. With the exception of the
Executive Incentive Plan (EIP) awards, the deferred bonus awards have service
conditions of one, two and three years after the date of the award and no
outstanding performance conditions. The awards for deferred bonus for
executive Directors in 2020 were made under the conditions of the EIP
including a performance underpin.
The awards made include the awards for executive Directors under the Executive
LTIP plan and certain awards under the deferred and discretionary share plans
to senior management with specific performance conditions.
Further details of the EIP and the Executive LTIP are set out in the
Directors' remuneration report.
The deferred and discretionary share plans also made a number of deferred fund
awards in the year end 31 December 2022 (see Section (d)(i) below).
Options and conditional awards are all at nil cost with the exception of
Sharesave where eligible employees in the UK and Ireland save a monthly amount
from their salaries, over either a three or five year period, which can be
used to purchase shares in the Company at a predetermined price.
The share incentive plan allows employees the opportunity to buy up to £1,800
of shares from their salary each year with the Group matching up to £600 per
year. The matching shares awarded are granted each month but are restricted
for three years (two years for Ireland).
In addition, the Group operates the following plans for which there are
outstanding awards but for which no awards were made during the year ended 31
December 2022:
Plan Options Conditional awards Restricted shares Typical vesting period (years) Contractual life for options Recipients Conditions which must be met prior to vesting
Aberdeen Asset Management Deferred Share Plan 2009(1) Yes No No 1-3 (3-5 for executive management) Up to 10 years from date of grant Executives and senior management Service only. There are no outstanding performance conditions at date of
grant.
Aberdeen Asset Management USA Deferred Share Award Plan No Yes No 1-3 (3-5 for executive management) Not applicable US based executives and senior management Service only. There are no outstanding performance conditions at date of
grant.
1. Included in Annual bonus deferred share options Section (b)(i) below.
The Group also operated the following plans for which no awards were made
during the year ended 31 December 2022 and for which all outstanding awards
were exercised by 31 December 2022:
Plan Options Conditional awards Restricted shares Typical vesting period (years) Contractual life for options Recipients Conditions which must be met prior to vesting
Standard Life Restricted stock plan (RSP) Yes No No 1-3 Up to six months after vesting Executives (other than executive Directors) and senior management Service, or service and performance conditions. These are tailored to the
individual award.
The Group also operated the following plans for which no awards were made
during the year ended 31 December 2021 and for which all outstanding awards
were exercised by 31 December 2021:
Plan Options Conditional awards Restricted shares Typical vesting period (years) Contractual life for options Recipients Conditions which must be met prior to vesting
Standard Life Long-Term Incentive Plan Yes No No 3 (5 for executive Directors) Up to six months after vesting Executives and senior management Service and performance conditions as set out in the prior years' Directors'
remuneration reports
Standard Life Investments Long-Term Incentive Plan Yes No No 3 Up to six months after vesting Executives and senior management Service and performance conditions
Standard Life Group Short-term incentive plan(1) Yes No No 3 Up to six months after vesting Executives and senior management Service only. There are no outstanding performance conditions at date of
grant.
1. Included in Annual bonus deferred share options. Refer Section (b)(i)
below.
(a) Employee share-based payments and deferred fund awards expense
The amounts recognised as an expense for equity-settled share-based payment
transactions and deferred fund awards with employees are as follows:
2022 2021
£m £m
Share options and share awards granted under deferred and discretionary share 22 41
plans(1)
Share options granted under long-term incentive plans - -
Share options granted under Sharesave 1 1
Matching shares granted under share incentive plans 1 1
Equity-settled share-based payments 24 43
Cash-settled deferred fund awards(2) 2 16
Total expense 26 59
1. Includes expense for annual bonus deferred share options and conditional
awards.
2. The expense for cash-settled deferred fund awards includes £2m (2021:
£4m) for awards related to funds which are consolidated.
Included in the expense above is £6m (2021: £16m) which is included in
Restructuring and corporate transaction expenses in the consolidated income
statement.
(b) Options and conditional awards granted
(b)(i) Deferred and discretionary share plans
The number and remaining contractual life for options outstanding and the
share price at exercise of options exercised during the year are as follows:
2022 2021
Deferred and discretionary share plans Annual bonus Deferred and discretionary share plans Annual bonus deferred share options
deferred share
options
Outstanding at 1 January 37,133,812 6,604,504 46,077,386 10,670,331
Granted 45,752,914 - 4,582,659 -
Forfeited (3,540,675) - (4,028,599) (47,887)
Exercised (18,228,674) (1,030,082) (9,497,634) (4,017,940)
Outstanding at 31 December 61,117,377 5,574,422 37,133,812 6,604,504
Exercisable at 31 December 3,907,131 5,418,292 1,591,628 5,920,543
Remaining contractual life of options outstanding (years)(1) 6.45 3.56 7.97 4.59
Options exercised during the year - -
Share price at time of exercise(1) 194p 189p 291p 287p
1. Weighted average.
The options granted under the deferred and discretionary share plans were made
throughout the year ended 31 December 2022 with a main grant date of 8 April
2022 and had a £nil exercise price. The weighted average option term was 2.23
years. The weighted average share price at grant date was 171p and the
weighted average fair value at grant date was 168p. The options include an
entitlement to the receipt of dividends in respect of awards that ultimately
vest between the date of grant and the vesting date.
In addition to nil costs options, 2,464,050 nil cost conditional awards were
also granted under the deferred and discretionary share plans (2021: 556,569)
with a weighted average share price at grant date of 174p which was also the
weighted average fair value at grant date.
(b)(ii) Standard Life/Standard Life Investments Long-term incentive plans
The number and remaining contractual life for options outstanding and the
share price at exercise of options exercised during the year are as follows:
2022 2021
RSP Long-term RSP
incentive plans
(excluding RSP)
Outstanding at 1 January 3,372 16,202,527 268,897
Granted - - -
Forfeited - (16,178,183) (153,176)
Exercised (3,372) (24,344) (112,349)
Outstanding at 31 December - - 3,372
Exercisable at 31 December - - -
Remaining contractual life of options outstanding (years)(1) - - 0.57
Options exercised during the year
Share price at time of exercise(1) 241p 286p 288p
1. Weighted average.
(b)(iii) Sharesave
The number, exercise price and remaining contractual life for options
outstanding and the share price at exercise of options exercised during the
year are as follows:
2022 2021
Sharesave Weighted average exercise price for Sharesave Sharesave Weighted average exercise price for Sharesave
Outstanding at 1 January 7,862,031 203p 8,734,919 210p
Granted 6,997,665 118p 1,081,098 206p
Forfeited (165,551) 191p (500,343) 216p
Exercised (46,727) 200p (272,103) 210p
Expired (759,965) 235p (531,108) 274p
Cancelled (3,905,890) 197p (650,432) 225p
Outstanding at 31 December 9,981,563 143p 7,862,031 203p
Exercisable at 31 December 1,390,636 206p 563,903 249p
Remaining contractual life of options outstanding (years)(1) 3.12 2.36
Options exercised during the year
Share price at time of exercise(1) 223p 265p
1. Weighted average.
The Sharesave options were granted on 12 October 2022 with an exercise price
of 118p. The weighted average option term was 3.63 years. The weighted average
share price at grant date was 133p and the weighted average fair value at
grant date was 20p. Sharesave options have no dividend entitlement. In
determining the fair value of options granted under the Sharesave scheme the
historic volatility of the share price over a period of up to five years and a
risk-free rate determined by reference to swap rates was also considered.
The following table shows the range of exercise prices of Sharesave options
outstanding.
2022 2021
Number of options outstanding Number of options outstanding
117p-188p 6,930,983 -
189p-199p 2,390,606 6,060,069
200p-327p 587,801 1,685,559
328p-345p 72,173 116,403
Outstanding at 31 December 9,981,563 7,862,031
(c) Matching shares granted under share incentive plans
During the year ended 31 December 2022, 490,814 matching shares were granted
under the share incentive plan (2021: 345,476). The weighted average share
price at grant date was 181p which was also the weighted average fair value at
grant date. The plans include the entitlement to the receipt of dividends in
respect of awards that ultimately vest between the date of grant and the
vesting date.
(d) Deferred fund awards and cash settled share based payments
(d)(i) Deferred fund awards
At 31 December 2022, the liability recognised for cash-settled deferred fund
awards was £44m (2021: £58m). The liability includes £9m (2021: £10m) for
deferred fund awards related to funds which are consolidated. The intrinsic
value for vested deferred fund awards related to funds which are consolidated
was £6m (2021: £6m).
(d)(ii) Cash settled share based payments
At 31 December 2022, the liability recognised for cash-settled share based
payments was £nil (2021: £nil).
42. Related party transactions
(a) Transactions and balances with related parties
In the normal course of business, the Group enters into transactions with
related parties that relate to investment management and insurance businesses.
In the year ended 31 December 2022, there have been no changes in the nature
of these transactions.
During the year, the Group recognised management fees of £3m (2021: £4m)
from the Group's defined benefit pension plans. The Group's defined benefit
pension plans have assets of £847m (2021: £1,138m) invested in investment
vehicles managed by the Group.
During the year, there were no sales to associates accounted for using the
equity method in relation to management fees (2021: £36m) and no purchases in
relation to services received (2021: £2m). Purchases and sales in 2021
related to Phoenix prior to its reclassification (refer Note 1(c)(iii) for
further details). Management fees included sales where the selection of the
Group as the asset manager was made by the underlying policyholder.
During the year ended 31 December 2022, there were sales to joint ventures
accounted for using the equity method of £4m (2021: £4m) and no purchases
from joint ventures (2021: £nil). During the year ended 31 December 2022, the
Group contributed capital of £2m (2021: £11m) to a joint venture. At 31
December 2022, there was no outstanding funding commitment to this joint
venture (31 December 2021: £2m).
The Group had no balances due to or from associates accounted for using the
equity method as at 31 December 2022 (2021: £nil). The Group had balances of
£1m due from joint ventures (2021: £1m) as at 31 December 2022. There were
no balances due to joint ventures (2021: £nil). During the year ended 31
December 2022, the Group contributed capital of £3m to an associate. At 31
December, the Group also has a commitment to make a capital contribution of
£2m to an associate.
In addition to these transactions between the Group and related parties during
the year, in the normal course of business the Group made a number of
investments into/divestments from investment vehicles managed by the Group
including investment vehicles which are classified as investments in
associates measured at FVTPL. Group entities paid amounts for the issue of
shares or units and received amounts for the cancellation of shares or units.
(b) Compensation of key management personnel
Key management personnel includes Directors of abrdn plc (since appointment)
and the members of the executive leadership team (since appointment).
The summary of compensation of key management personnel is as follows:
2022 2021
£m £m
Salaries and other short-term employee benefits 11 12
Post-employment benefits - -
Share-based payments and deferred fund awards 6 7
Termination benefits 2 1
Total compensation of key management personnel 19 20
(c) Transactions with key management personnel and their close family members
Certain members of key management personnel hold investments in investments
products which are managed by the Group. None of the amounts concerned are
material in the context of funds managed by the Group. All transactions
between key management and their close family members and the Group during the
year are on terms which are equivalent to those available to all employees of
the Group.
43. Capital management
(a) Capital and risk management policies and objectives
Managing capital is the ongoing process of determining and maintaining the
quantity and quality of capital appropriate for the Group and ensuring capital
is deployed in a manner consistent with the expectations of our stakeholders.
For these purposes, the Board considers our key stakeholders to be our
clients, the providers of capital (our equity holders and holders of our
subordinated liabilities) and the Financial Conduct Authority (FCA) as the
lead prudential supervisor for the Group.
There are two primary objectives of capital management within the Group. The
first objective is to ensure that capital is, and will continue to be,
adequate to maintain the required level of financial stability of the Group
and hence to provide an appropriate degree of security to our stakeholders.
The second objective is to create equity holder value by driving profit
attributable to equity holders.
The treasury and capital management policy, which is subject to review at
least annually, forms one element of the Group's overall management framework.
Most notably, it operates alongside and complements the strategic investment
policy and the Group risk policies. Integrating policies in this way enables
the Group to have a capital management framework that robustly links the
process of capital allocation, value creation and risk management.
Capital requirements are forecast on a periodic basis and assessed against the
forecast available capital resources. In addition, rates of return achieved on
capital invested are assessed against hurdle rates, which are intended to
represent the minimum acceptable return given the risks associated with each
investment. Ongoing monitoring of investments is incorporated into the Group's
established performance management process. The capital planning process is
the responsibility of the Chief Financial Officer. Capital plans are
ultimately subject to approval by the Board.
The formal procedures for identifying and assessing risks that could affect
the capital position of the Group are described in the Risk management section
of the Strategic report. Information on financial instruments risk is also
provided in Note 35.
(b) Regulatory capital
(b)(i) Regulatory capital framework
From 1 January 2022, the Group has been supervised under the Investment Firms
Prudential Regime (IFPR). Prior to this date, the Group was supervised under
the CRD IV regulatory regime. The Group's regulatory capital position under
IFPR is determined by consolidating the eligible capital and reserves of the
Group (subject to a number of deductions) to derive regulatory capital
resources, and comparing this to the Group's regulatory capital requirements.
Stress testing is completed to inform the appropriate level of regulatory
capital and liquidity that the Group must hold, with results shared with the
FCA at least annually. In addition, the Group monitors a range of capital and
liquidity statistics on a daily, monthly or less frequent basis as required.
Surplus capital levels are forecast, taking account of projected dividends and
investment requirements, to ensure that appropriate levels of capital
resources are maintained.
The Group is required to hold capital resources to cover both the Own Funds
Requirement and the Own Funds Threshold Requirement described below in
complying with the Overall Financial Adequacy Rule.
Own Funds Requirement
The Own Funds Requirement focuses on the Group's permanent minimum capital
requirement, its fixed overhead requirement and its K-factor requirement with
the own funds requirement being the highest of the three. At 31 December 2022,
the Group's indicative Own Funds Requirement was £0.3bn.
Own Funds Threshold Requirement
The Own Funds Threshold Requirement supplements the own funds requirement via
the Internal Capital Adequacy and Risk Assessment (ICARA), which is the means
by which the Group assesses the level of capital that adequately supports all
of the relevant current and future risks in its business, taking into account
potential periods of financial stress during the economic cycle as well as a
potential wind-down scenario with the own funds threshold requirement being
the highest of the two, as per the Overall Financial Adequacy Rule. The
results of the Group's ICARA process will be subject to periodic review by the
FCA under the Supervisory Review and Evaluation Process (SREP).
Under IFPR the Group fully excludes the value of its holding in significant
listed investments from its capital resources. IFPR also includes constraints
on the proportion of the minimum capital requirement that can be met by each
tier of capital. As a result, approximately £0.3bn of Tier 2 capital, whilst
continuing to be reported within the Group's capital resources, is not
available to meet the minimum capital requirement.
(b)(ii) IFPR (unaudited)
2022(1) 2021(2)
£bn £bn
IFRS equity attributable to equity holders of abrdn plc 5.7 7.6
Deductions for intangibles and defined benefit pension assets, net of related (2.3) (2.2)
deferred tax liabilities
Deductions for significant investments in financial sector entities (1.4) (2.0)
Deductions for non-significant investments in financial sector entities (0.2) (0.5)
Other deductions and adjustments, including provision for foreseeable dividend (0.5) (0.5)
Common Equity Tier 1 capital resources 1.3 2.4
Additional Tier 1 capital resources 0.2 0.2
Total Tier 1 capital resources 1.5 2.6
Tier 2 capital resources 0.6 0.6
Total regulatory capital resources 2.1 3.2
Subordinated debt restriction (0.3) (0.3)
Total regulatory capital resources available to meet total regulatory capital 1.8 2.9
requirements
Total regulatory capital requirements (1.1) (1.1)
Surplus regulatory capital 0.7 1.8
CET1 ratio 408% 774%
1. 2022 draft position on 28 February 2023 following finalisation of the
Annual report and accounts.
2. Indicative regulatory capital position under IFPR at 31 December 2021 if
the Group had been supervised under IFPR at this date.
The Group has complied with all externally imposed capital requirements during
the year.
44. Events after the reporting date
In January 2023 the Group decided to exit a leased US property and an
impairment of £13m was recognised on the right-of-use property asset.
On 26 February 2023, the Group agreed the sale of abrdn Capital Limited (aCL),
its discretionary fund management business to LGT. aCL is part of the Personal
segment. The sale is expected to complete in the second half of 2023,
following satisfaction of certain conditions including receipt of customary
regulatory approvals. The sale involves the transfer of approximately £6.1bn
in assets under management (as at 31 December 2022) and approximately 140
employees. The agreed purchase price to be paid at completion is £140m,
subject to certain adjustments, principally reflecting activity in the period
to completion. The sale is expected to result in an IFRS profit on disposal of
subsidiaries of approximately £60m and an IFPR regulatory capital benefit of
approximately £120m.
45. Related undertakings
The Companies Act 2006 requires disclosure of certain information about the
Group's related undertakings which is set out in this Note. Related
undertakings are subsidiaries, joint ventures, associates and other
significant holdings. In this context significant means either a shareholding
greater than or equal to 20% of the nominal value of any class of shares, or a
book value greater than 20% of the Group's assets.
The particulars of the Company's related undertakings at 31 December 2022 are
listed below. For details of the Group's consolidation policy refer to (b)
Basis of consolidation in the Presentation of consolidated financial
statements section. Under that policy limited partnerships and limited
liability companies in which the Group has no interest but whose general
partner or manager is controlled by the Group are not consolidated. However
such limited partnerships are considered to be subsidiaries under Companies
Act 2006 and therefore are listed below. Where the Group has no interest in a
limited partnership or limited liability company that is considered a related
entity, the interest held is disclosed as 0%.
The ability of subsidiaries to transfer cash or other assets within the Group
for example through payment of cash dividends is generally restricted only by
local laws and regulations, and solvency requirements. Included in equity
attributable to equity holders of abrdn plc at 31 December 2022 is £90m
(2021: £104m) related to the abrdn Financial Fairness Trust, a subsidiary
undertaking of the Group. The assets of the abrdn Financial Fairness Trust are
restricted to be used for charitable purposes.
The registered head office of all related undertakings is 1 George Street,
Edinburgh, EH2 2LL unless otherwise stated.
(a) Direct subsidiaries
Name of related undertaking Share class(1) % interest held(2)
30 STMA 1 Limited(3) Ordinary shares 100%
30 STMA 2 Limited(3) Ordinary shares 100%
30 STMA 3 Limited(3) Ordinary shares 100%
30 STMA 4 Limited(3) Ordinary shares 100%
30 STMA 5 Limited(3) Ordinary shares 100%
6 SAS 3 Limited(3) Ordinary shares 100%
Aberdeen Corporate Services Limited Ordinary shares 100%
abrdn Charitable Foundation(4) N/A 100%
abrdn Client Management Limited Ordinary shares 100%
abrdn Finance Limited Ordinary shares 100%
abrdn Financial Fairness Trust N/A 100%
abrdn Financial Planning Limited(3) Ordinary shares 100%
abrdn Holdings Limited(4) Ordinary shares 100%
abrdn Investments (Holdings) Limited Ordinary shares 100%
abrdn (Mauritius Holdings) 2006 Limited(5) Ordinary shares 100%
Antler Holdco Limited(6) Ordinary shares 100%
Interactive Investor Limited(7) Ordinary shares 100%
Focus Business Solutions Limited(8) Ordinary shares 100%
Standard Life Aberdeen Trustee Company Limited Ordinary shares 100%
Standard Life Savings Limited Ordinary shares 100%
The abrdn Company 2006 N/A 100%
Threesixty Services LLP(9) Limited Liability Partnership 100%
Threesixty Support LLP(9) Limited Liability Partnership 100%
(b) Other subsidiaries
Name of related undertaking Share class(1) % interest held(2)
6 SAS 1 Limited Ordinary shares 100%
6 SAS 2 Limited Ordinary shares 100%
Aberdeen ACM Team LP(4) Limited Partnership 0%
Aberdeen ACP LLP(4) Limited Liability Partnership 100%
Aberdeen Asia IV (General Partner) S.a.r.l.(10) Ordinary shares 100%
Aberdeen Asia Pacific Fund, LP(11) Limited Partnership 0%
Aberdeen Asia Pacific Fund II, LP(11) Limited Partnership 0%
Aberdeen Asia Pacific II (Offshore), LP(11) Limited Partnership 0%
Aberdeen Asia Pacific III Ex-Co-Investment (Offshore), LP(11) Limited Partnership 0%
Aberdeen Asia Pacific III Ex-Co-Investment, LP(11) Limited Partnership 0%
Aberdeen Asia Pacific III, LP(11) Limited Partnership 0%
Name of related undertaking Share class(1) % interest held(2)
Aberdeen Asia Partners III, LP(12) Limited Partnership 0%
Aberdeen ASIF Carry LP(4) Limited Partnership 25%
Aberdeen Asset Management (Thailand) Ltd(13) Ordinary shares 100%
Aberdeen Asset Management Cayman Limited(11) Ordinary shares 100%
Aberdeen Asset Management Denmark A/S(14) Ordinary shares 100%
Aberdeen Asset Management Finland Oy(15) Ordinary shares 100%
Aberdeen Asset Management US GP Control LLC(12) Limited Liability Company 100%
Aberdeen Asset Middle East Limited(16) Ordinary shares 100%
Aberdeen Capital Management LLC(12) Limited Liability Company 100%
Aberdeen Capital Managers GP LLC(17) Limited Liability Company 100%
Aberdeen Claims Administration, Inc.(18) Ordinary shares 100%
Aberdeen Co-Investment Mandate LP(4) Limited Partnership 0%
Aberdeen Direct Property (Holding) Limited(3) Ordinary shares 100%
Aberdeen Emerging Asia Fund, LP(11) Limited Partnership 0%
Aberdeen Emerging Asia Pacific II (Offshore), LP(11) Limited Partnership 0%
Aberdeen Emerging Asia Pacific III Ex-Co-Investments, LP(11) Limited Partnership 0%
Aberdeen Energy & Resource Company IV, LLC(12) Limited Liability Company 73%
Aberdeen Energy & Resources Company V, LLC(12) Limited Liability Company 93%
Aberdeen Energy & Resources Partners II, LP(12) Limited Partnership 0%
Aberdeen Energy & Resources Partners III, LP(12) Limited Partnership 0%
Aberdeen Energy & Resources Partners IV, LP(12) Limited Partnership 1%
Aberdeen Energy & Resources Partners V, LP(12) Limited Partnership 2%
Aberdeen European Infrastructure Carry GP Limited(4) Ordinary shares 100%
Aberdeen European Infrastructure Carry Limited(4) Ordinary shares 100%
Aberdeen European Infrastructure Co-Invest II LP(3) Limited Partnership 0%
Aberdeen European Infrastructure GP Limited(3) Ordinary shares 100%
Aberdeen European Infrastructure GP II Limited(3) Ordinary shares 100%
Aberdeen European Infrastructure GP III Limited(3) Ordinary shares 100%
Aberdeen European Infrastructure III A Limited(3) Ordinary shares 100%
Aberdeen European Infrastructure III B Limited(3) Ordinary shares 100%
Aberdeen European Infrastructure IV Ltd(3) Ordinary shares 100%
Aberdeen European Infrastructure Partners Carry LP(4) Limited Partnership 25%
Aberdeen European Infrastructure Partners Carry II LP(4) Limited Partnership 25%
Aberdeen European Infrastructure Partners Carry III LP(4) Limited Partnership 25%
Aberdeen European Infrastructure Partners LP(3) Limited Partnership 3%
Aberdeen European Infrastructure Partners II LP(3) Limited Partnership 3%
Aberdeen European Infrastructure Partners III LP(3) Limited Partnership 5%
Aberdeen European Opportunities Property Fund of Funds LLC(18) Limited Liability Company 3%
Aberdeen European Residential Opportunities Fund SCSp(19) Limited Partnership 0%
Aberdeen Fund Distributors LLC(18) Limited Liability Company 100%
Aberdeen Fund Management II Oy(15) Ordinary shares 100%
Aberdeen General Partner 1 Limited(4) Ordinary shares 100%
Aberdeen General Partner 2 Limited(4) Ordinary shares 100%
Aberdeen General Partner CAPELP Limited(11) Ordinary shares 100%
Aberdeen General Partner CGPLP Limited(11) Ordinary shares 100%
Aberdeen General Partner CMENAPELP Limited(11) Ordinary shares 100%
Aberdeen General Partner CPELP II Limited(11) Ordinary shares 100%
Aberdeen General Partner CPELP Limited(11) Ordinary shares 100%
Aberdeen Global ex-Japan FoF's LP(11) Limited Partnership 5%
Aberdeen Global ex-Japan GP Limited(11) Ordinary shares 100%
Aberdeen Global Infrastructure Carry GP Limited(4) Ordinary shares 100%
Aberdeen Global Infrastructure GP Limited(20) Ordinary shares 100%
Aberdeen Global Infrastructure GP II Limited(20) Ordinary shares 100%
Aberdeen Global Infrastructure Partners II Carry LP(4) Limited Partnership 25%
Aberdeen Global Infrastructure Partners II LP(20) Limited Partnership 0%
Name of related undertaking Share class(1) % interest held(2)
Aberdeen Global Infrastructure Partners III Carry LP Limited Partnership 25%
Aberdeen Global Infrastructure Partners LP(20) Limited Partnership 0%
Aberdeen Global Partners, LP(12) Limited Partnership 0%
Aberdeen GP 1 LLP(4) Limited Liability Partnership 100%
Aberdeen GP 2 LLP(4) Limited Liability Partnership 100%
Aberdeen GP 3 LLP(4) Limited Liability Partnership 100%
Aberdeen Infrastructure Feeder GP Limited(4) Ordinary shares 100%
Aberdeen Infrastructure Finance GP Limited(20) Ordinary shares 100%
Aberdeen Infrastructure GP II Limited(3) Ordinary shares 100%
Aberdeen Infrastructure Partners II Carry LP(4) Limited Partnership 25%
Aberdeen Infrastructure Partners II LP(3) Limited Partnership 0%
Aberdeen Infrastructure Partners LP Inc(20) Limited Partnership 0%
Aberdeen International Partners II, LP(12) Limited Partnership 0%
Aberdeen International Partners II (Offshore), LP(21) Limited Partnership 0%
Aberdeen International Partners III, LP(12) Limited Partnership 0%
Aberdeen International Partners III (Offshore), LP(21) Limited Partnership 0%
Aberdeen Investment Company Limited(4) Ordinary shares 100%
Aberdeen Investment Solutions Limited(22) Ordinary shares 100%
Aberdeen Keva Asia IV Property Partners SCSp(10) Limited Partnership 1%
Aberdeen Next Generation Partners V, LP(12) Limited Partnership 0%
Aberdeen Pension Trustees Limited(4) Ordinary shares 100%
Aberdeen Pooling II GP AB(23) Ordinary shares 100%
Aberdeen Private Equity Company VII, LLC(12) Limited Liability Company 67%
Aberdeen Private Equity Company VIII, LLC(12) Limited Liability Company 77%
Aberdeen Property Fund Management (Jersey) Limited(24) Ordinary shares 100%
Aberdeen Property Fund Management Estonia Ou(25) Ordinary shares 100%
Aberdeen Property Investors (General Partner) S.a.r.l. (26) Ordinary shares 100%
Aberdeen Property Investors Estonia Ou(25) Ordinary shares 100%
Aberdeen Property Investors Limited Partner Oy(15) Ordinary shares 100%
Aberdeen Property Investors The Netherlands BV(27) Ordinary shares 100%
Aberdeen Property Secondaries Partners II(19) Limited Partnership 2%
Aberdeen Real Estate Fund Finland II LP(28) Limited Partnership 100%
Aberdeen Real Estate Partners II, LP(12) Limited Partnership 0%
Aberdeen Real Estate Partners III, LP(12) Limited Partnership 0%
Aberdeen Secondaries II GP S.a.r.l. (19) Ordinary shares 100%
Aberdeen Sidecar LP Inc(20) Limited Partnership 0%
Aberdeen Standard 2019 European PE A Carry LP Limited Partnership 40%
Aberdeen Standard 2019 European PE B Carry LP Limited Partnership 40%
Aberdeen Standard Carlsbad Carry LP(4) Limited Partnership 25%
Aberdeen Standard Carlsbad GP Limited(20) Ordinary shares 100%
Aberdeen Standard Carlsbad LP(20) Limited Partnership 0%
Aberdeen Standard Global Infrastructure Partners III LP(20) Limited Partnership 0%
Aberdeen Standard Core Infrastructure III LTP LP Limited Partnership 100%
Aberdeen Standard Core Infrastructure III SCSp(19) Limited Partnership 1%
Aberdeen Standard ECF II GP LP Limited Partnership 0%
Aberdeen Standard European Infrastructure GP IV Limited(3) Ordinary shares 100%
Aberdeen Standard European Infrastructure Partners Carry IV LP Limited Partnership 25%
Aberdeen Standard European Infrastructure Partners Co-invest IV LP(3) Limited Partnership 0%
Aberdeen Standard European Infrastructure Partners IV LP(3) Limited Partnership 5%
Aberdeen Standard European Long Income Real Estate Fund SCSp(19) Limited Partnership 0%
Aberdeen Standard European Property Growth Fund LP(3) Limited Partnership 0%
Aberdeen Standard Global Infrastructure GP III Ltd(20) Ordinary shares 100%
Aberdeen Standard Global Infrastructure Partners I (2021) Carry LP Limited Partnership 25%
Aberdeen Standard Global Infrastructure Partners III (2021) Carry LP(4) Limited Partnership 25%
Aberdeen Standard Global Risk Mitigation Fund (Australia) (29) Unit Trust 19%
Aberdeen Standard Gulf Carry GP Limited(4) Ordinary shares 100%
Aberdeen Standard Gulf Carry LP(4) Limited Partnership 10%
Name of related undertaking Share class(1) % interest held(2)
Aberdeen Standard Investments ETFs - abrdn Bloomberg Industrial Metals ETF 80%
Strategy K-1 Free ETF(30)
Aberdeen Standard Investments Sweden AB(23) Ordinary shares 100%
Aberdeen Standard Investments Taiwan Limited(31) Ordinary shares 100%
Aberdeen Standard Liquidity Fund (Lux) - Seabury Sterling Liquidity 1 Fund(19) SICAV 100%
Aberdeen Standard MSPC General Partner S.a.r.l.(19) Ordinary shares 100%
Aberdeen Standard Multi-Sector Private Credit Fund SCSp(19) Limited Partnership 3%
Aberdeen Standard Pan European Residential Property Fund SICAV-RAIF(19) Limited Partnership 0%
Aberdeen Standard Private Equity Company IX, LLC(12) Limited Liability Company 80%
Aberdeen Standard Private Real Assets Co-Investment Fund I GP, LLC(12) Limited Liability Company 80%
Aberdeen Standard Private Real Assets Co-Investment Fund I, LP(12) Limited Partnership 1%
Aberdeen Standard Secure Credit LP Limited Partnership 0%
Aberdeen Standard SICAV I - Asian Credit Sustainable Bond Fund(19) SICAV 55%
Aberdeen Standard SICAV I - Asian Sustainable Development Equity Fund(19) SICAV 98%
Aberdeen Standard SICAV I - ASI-CCBI Belt & Road Bond Fund(19) SICAV 32%
Aberdeen Standard SICAV I - China Next Generation Fund(19) SICAV 73%
Aberdeen Standard SICAV I - Climate Transition Bond Fund(19) SICAV 55%
Aberdeen Standard SICAV I - Emerging Markets Sustainable Development Corporate SICAV 7%
Bond Fund(19)
Aberdeen Standard SICAV I - Global Climate & Environment Equity Fund(19) SICAV 84%
Aberdeen Standard SICAV I - Global Mid-Cap Equity Fund(19) SICAV 38%
Aberdeen Standard SOF IV Feeder LP Limited Partnership 0%
Aberdeen Standard SOF IV GP LP Limited Partnership 25%
Aberdeen Standard SOF IV LP Limited Partnership 0%
Aberdeen Standard SOF Evergreen GP LP Limited Partnership 40%
Aberdeen Standard SOF Evergreen LP Limited Partnership 0%
Aberdeen Standard UK Shopping Centre Feeder Fund Limited Partnership(3) Limited Partnership 100%
Aberdeen Standard U.S. Private Equity IX, LP(12) Limited Partnership 0%
Aberdeen Standard Venture Company XII, LLC(12) Limited Liability Company 91%
Aberdeen Trust Limited(4) Ordinary shares 100%
Aberdeen UK Infrastructure Carry GP Limited(4) Ordinary shares 100%
Aberdeen UK Infrastructure Carry Limited(4) Ordinary shares 100%
Aberdeen Unit Trust Managers Limited(4) Ordinary shares 100%
Aberdeen U.S. Private Equity III (Offshore), LP(21) Limited Partnership 0%
Aberdeen U.S. Private Equity IV, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity IV (Offshore), LP(21) Limited Partnership 0%
Aberdeen U.S. Private Equity IV SPV-A, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity V, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity V (Offshore), LP(21) Limited Partnership 0%
Aberdeen U.S. Private Equity V SPV-A, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity VI, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity VI (Offshore), LP(21) Limited Partnership 0%
Aberdeen U.S. Private Equity VI SPV-A, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity VII, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity VII (Offshore), LP(21) Limited Partnership 0%
Aberdeen U.S. Private Equity VIII, LP(12) Limited Partnership 0%
Aberdeen U.S. Private Equity VIII (Offshore), LP(21) Limited Partnership 0%
Aberdeen Venture Company X, LLC(12) Limited Liability Company 60%
Aberdeen Venture Company XI, LLC(12) Limited Liability Company 87%
Aberdeen Venture Partners VII, LP(12) Limited Partnership 0%
Aberdeen Venture Partners VII (Offshore), LP(21) Limited Partnership 0%
Aberdeen Venture Partners VII SPV-A, LP(12) Limited Partnership 0%
Aberdeen Venture Partners VIII, LP(12) Limited Partnership 0%
Aberdeen Venture Partners VIII (Offshore), LP(21) Limited Partnership 0%
Aberdeen Venture Partners VIII SPV-A, LP(12) Limited Partnership 0%
Aberdeen Venture Partners VIII SPV-B, LP(12) Limited Partnership 0%
Aberdeen Venture Partners VIII SPV-C, LP(12) Limited Partnership 0%
Name of related undertaking Share class(1) % interest held(2)
Aberdeen Venture Partners IX, LP(12) Limited Partnership 0%
Aberdeen Venture Partners IX (Offshore), LP(21) Limited Partnership 0%
Aberdeen Venture Partners X, LP(12) Limited Partnership 1%
Aberdeen Venture Partners X (Offshore) LP(21) Limited Partnership 0%
Aberdeen Venture Partners X SPV-A, LP(12) Limited Partnership 0%
Aberdeen Venture Partners X SPV-B, LP(12) Limited Partnership 0%
Aberdeen Venture Partners XI, LP(12) Limited Partnership 1%
Aberdeen Venture Partners XI (Offshore), LP(21) Limited Partnership 0%
Aberdeen Venture Partners XI SPV-A, LP(12) Limited Partnership 0%
Aberdeen Venture Partners XI SPV-B, LP(12) Limited Partnership 0%
Aberdeen Venture Partners XII, LP(12) Limited Partnership 1%
Aberdeen Venture Partners XIII LP(12) Limited Partnership 1%
abrdn - Emerging Markets Equity ADR Fund(12) Ordinary shares 100%
abrdn - International Equity ADR Fund(12) Ordinary shares 100%
abrdn - US Equity Impact Fund(12) Ordinary shares 100%
abrdn - US SMID Cap Equity Fund(12) Ordinary shares 100%
abrdn ACS I - abrdn Sustainable Index UK Equity Fund(3) OEIC 23%
abrdn Alternative Funds Limited Ordinary shares 100%
abrdn Alternative Holdings Limited(4) Ordinary shares 100%
abrdn Alternative Investments Limited(3) Ordinary shares 100%
abrdn Asia Limited(32) Ordinary shares 100%
abrdn Australia Ltd(29) Ordinary shares 100%
abrdn Brasil Investimentos Ltda(33) Limited Liability Company 100%
abrdn Canada Funds - Global Smaller Companies Equity Fund(34) Private Commingled Fund 100%
abrdn Canada Limited(34) Ordinary shares 100%
abrdn Capital (CI) Limited(35) Ordinary shares 100%
abrdn Capital International Limited(35) Ordinary shares 100%
abrdn Capital Limited Ordinary shares 100%
abrdn Capital Partners LLP Limited Liability Partnership 100%
abrdn Colombia SAS(36) Ordinary shares 100%
abrdn Commercial Real Estate Debt II LP Limited Partnership 0%
abrdn Corporate Secretary Limited Ordinary shares 100%
abrdn CP (Holdings) Limited Ordinary shares 100%
abrdn (CRED II) GP Limited Ordinary shares 100%
abrdn Digital Solutions Limited(22) Ordinary shares 100%
abrdn Eclipse HFRI 500 SP(11) Private Commingled Fund 36%
abrdn ETFs Advisors LLC(12) Limited Liability Company 100%
abrdn ETFs Sponsor LLC(12) Limited Liability Company 100%
abrdn Financial Planning & Advice Limited(3) Ordinary A Shares 100%
Ordinary B Shares
abrdn Founder Co Limited Ordinary shares 100%
abrdn Fund Managers Limited(3) Ordinary shares 100%
abrdn Global Absolute Return Strategies Master Fund Limited(11) Ordinary shares 100%
abrdn Global Absolute Return Strategies Offshore Feeder Fund Limited(11) Ordinary shares 100%
abrdn Global Absolute Return Strategies Onshore Feeder Fund, LP(12) Limited Partnership 0%
abrdn Hong Kong Limited(37) Ordinary shares 100%
abrdn (IL Infrastructure Debt) GP Limited(3) Ordinary shares 100%
abrdn Inc.(12) Ordinary shares 100%
abrdn Inflation-Linked Infrastructure Debt LP(3) Limited Partnership 0%
abrdn Investment Management Limited Ordinary shares 100%
abrdn Investments Beteiligungs GmbH(38) Limited Liability Company 90%
abrdn Investments Deutschland AG(38) Ordinary shares 90%
abrdn Investments Group Limited(3) Ordinary shares 100%
abrdn Investments Holdings Europe Limited(3) Ordinary shares 100%
abrdn Investments Ireland Limited(39) Ordinary shares 100%
abrdn Investments Jersey Limited(35) Ordinary shares 100%
abrdn Investments Limited(4) Ordinary shares 100%
Name of related undertaking Share class(1) % interest held(2)
abrdn Investments Luxembourg Corporate Manager S.a r.l.(19) Ordinary shares 100%
abrdn Investments Luxembourg S.A.(19) Ordinary shares 100%
abrdn Investments Switzerland AG(40) Ordinary shares 100%
abrdn Islamic Malaysia Sdn. Bhd.(41) Ordinary shares 100%
abrdn Japan Limited(42) Ordinary shares 100%
abrdn Jersey Limited(43) Ordinary shares 100%
abrdn Korea Co. Limited.(44) Ordinary shares 100%
abrdn Korea GP 2 Pte. Ltd(45) Ordinary shares 100%
abrdn Korea Separate Account 2 LP(45) Limited Partnership 1%
abrdn Life and Pensions Limited(3) Ordinary shares 100%
abrdn Malaysia Sdn. Bhd.(41) Ordinary shares, Irredeemable non-convertible preference shares 100%
abrdn Nominees Services HK Limited(37) Ordinary shares 100%
abrdn OEIC I - abrdn China A Share Equity Fund(3) OEIC 45%
abrdn OEIC I - abrdn Sterling Long Dated Government Bond Fund(3) OEIC 57%
abrdn OEIC III - abrdn MyFolio Sustainable I Fund(3) OEIC 45%
abrdn OEIC III - abrdn MyFolio Sustainable II Fund(3) OEIC 23%
abrdn OEIC III - abrdn MyFolio Sustainable V Fund(3) OEIC 29%
abrdn OEIC III - abrdn MyFolio Sustainable Index I Fund(3) OEIC 100%
abrdn OEIC III - abrdn MyFolio Sustainable Index II Fund(3) OEIC 88%
abrdn OEIC III - abrdn MyFolio Sustainable Index III Fund(3) OEIC 94%
abrdn OEIC III - abrdn MyFolio Sustainable Index IV Fund(3) OEIC 99%
abrdn OEIC III - abrdn MyFolio Sustainable Index V Fund(3) OEIC 100%
abrdn OEIC V - abrdn Multi-Asset Climate Solutions Fund(3) OEIC 76%
abrdn Pan European Residential Property Feeder S.C.A. SICAV RAIF(19) Limited Partnership 0%
abrdn Poinsettia GP Ltd(11) Ordinary shares 100%
abrdn Portfolio Investments abrdn Asia-China Bond(32) Corporate Fund 100%
abrdn Portfolio Investments Limited Ordinary shares 100%
abrdn Portfolio Investments US Inc.(12) Ordinary shares 100%
abrdn Premises Services Limited Ordinary shares 100%
abrdn Private Equity (Europe) Limited Ordinary shares 100%
abrdn Private Fund Management (Shanghai) Company Limited(46) Ordinary shares 100%
abrdn Property Investors France SAS(47) Ordinary shares 100%
abrdn Real Estate Operations Limited(4) Ordinary shares 100%
abrdn SICAV II - Multi Asset Climate Opportunities(48) SICAV 99%
abrdn Si Yuan Private Fund Management (Shanghai) Company Limited(46) Ordinary shares 100%
abrdn (SLSPS) Pension Trustee Company Ltd Ordinary shares 100%
abrdn SPV 2021 A GP, LLC(12) Limited Liability Company 79%
abrdn Unit Trust I - abrdn Diversified Growth Fund(3) Unit trust 51%
abrdn (USA) Limited Ordinary shares 100%
abrdn Venture Company XIII, LLC(12) Limited Liability Company 46%
ACM Carry LP(4) Limited Partnership 40%
AEROF (Luxembourg) GP S.a.r.l.(19) Ordinary shares 100%
AERP V-A Master, LP(12) Limited Partnership 0%
AIA Series T Holdings LLC(49) Limited Liability Company 0%
AIPP Folksam Europe II Kommanditbolag(50) Limited Partnership 1%
AIPP Pooling I SA(19) Ordinary shares 100%
Airport Industrial GP Limited(3) Ordinary shares 100%
Airport Industrial Limited Partnership(3) Limited Partnership 0%
Aldwych Capital Partners, LP Limited Partnership 0%
Alliance Trust Savings Limited Ordinary shares 100%
Andean Social Infrastructure (No. 1) Limited(3) Ordinary shares 100%
Andean Social Infrastructure Fund I LP(11) Limited Partnership 5%
Andean Social Infrastructure GP Limited(11) Ordinary shares 100%
Arden Garden State NJ Fund, LP(49) Limited Partnership 0%
Arden Institutional Advisers, LP(49) Limited Partnership 0%
Name of related undertaking Share class(1) % interest held(2)
Arthur House (No.6) Limited(3) Ordinary shares 100%
Artio Global Investors Inc.(18) Ordinary shares 100%
ASI Core Private Equity Fund GP, LLC(12) Limited Liability Company 94%
ASI Direct RE GP LLP Limited Liability Partnership 100%
ASI European Private Equity 2019 B LP(12) Limited Partnership 0%
ASI (General Partner 2019 European PE A Carry) Limited Ordinary shares 100%
ASI (General Partner 2019 European PE A) S.a.r.l.(19) Ordinary shares 100%
ASI (General Partner 2019 European PE B) Limited Ordinary shares 100%
ASI (General Partner 2019 European PE B) LLC(12) Ordinary shares 0%
ASI (General Partner ECF II) Limited Ordinary shares 100%
ASI (General Partner PE2) Limited Ordinary shares 100%
ASI (General Partner PFF 2018) S.a.r.l.(19) Ordinary shares 100%
ASI (General Partner SOF IV) Limited Ordinary shares 100%
ASI (Gold) Limited(51) Ordinary shares 100%
ASI Han Co-Investment LP Limited Partnership 93%
ASI (KFAS) RE GP LLP Limited Liability Partnership 100%
ASI Little Mill Carry LP(4) Limited Partnership 0%
ASI Little Mill Co-Invest LP(4) Limited Partnership 0%
ASI Little Mill LP(4) Limited Partnership 0%
ASI Mid-Market 1 LP(4) Limited Partnership 0%
ASI MM Executive Co Investment LP(4) Limited Partnership 0%
ASI (NWPE 2021) Carry LP Limited Partnership 0%
ASI PE 1 Carry LP(4) Limited Partnership 40%
ASI (PGPE III) GP LP Limited Partnership 40%
ASI Phoenix Fund Financing SCSp(19) Limited Partnership 0%
ASI Phoenix Global Private Equity III LP Limited Partnership 0%
ASI Phoenix Venture Capital Partners LP Limited Partnership 0%
ASI Private Equity 1 LP(4) Limited Partnership 0%
ASI Private Equity 2 GP LP Limited Partnership 40%
ASI Private Equity 2 LP Limited Partnership 0%
ASI (PVCP) GP LP Limited Partnership 0%
ASI REMM GP LLP(4) Limited Liability Partnership 100%
ASI Shin Co-Investment LP(4) Limited Partnership 100%
ASI Shin Global Investment GP Limited(11) Ordinary shares 100%
ASI (SOF E GP) Limited Ordinary shares 100%
ASIF Sidecar Carry LP(4) Limited Partnership 25%
ASPER (Luxembourg) GP S.a.r.l.(19) Ordinary shares 100%
Ballentine Core Private Equity Fund, LP(12) Limited Partnership 25%
BOSEMP Feeder LP(4) Limited Partnership 0%
Brain Co-Invest General Partner LLP Limited Liability Partnership 100%
Brain Co-Invest LP Limited Partnership 0%
C.C. U.S. Private Equity Fund GP, LLC(12) Limited Liability Company 81%
C.C. U.S. Private Equity Fund GP II, LLC(12) Limited Liability Company 84%
C.C. U.S. Private Equity Fund, LP(12) Limited Partnership 1%
C.C. U.S. Private Equity Fund II, LP(12) Limited Partnership 0%
Coutts Asian Private Equity Limited Partnership(11) Limited Partnership 0%
Coutts Global Property Limited Partnership(11) Limited Partnership 0%
Coutts Middle East and North Africa Private Equity Limited Partnership(11) Limited Partnership 0%
Coutts Private Equity Limited Partnership(11) Limited Partnership 0%
Coutts Private Equity Limited Partnership II(11) Limited Partnership 0%
CPP General Partner Limited Partnership Limited Partnership 20%
Cumberland Place Financial Management Limited(3) Ordinary shares 100%
Edinburgh Fund Managers Group Limited(4) Ordinary shares 100%
Edinburgh Fund Managers Plc Ordinary shares 100%
Edinburgh Unit Trust Managers Limited(4) Ordinary shares 100%
Deferred shares
Elevate Portfolio Services Limited(3) Ordinary shares 100%
Name of related undertaking Share class(1) % interest held(2)
ESF I Executive Co Investment Limited Partnership Limited Partnership 0%
ESP 2004 Co Investment Limited Partnership Limited Partnership 0%
ESP 2004 Conduit LP Limited Partnership 0%
ESP 2004 General Partner Limited Partnership Limited Partnership 0%
ESP 2006 Co Investment Limited Partnership Limited Partnership 0%
ESP 2006 Conduit LP Limited Partnership 0%
ESP 2006 General Partner Limited Partnership Limited Partnership 20%
ESP 2008 Conduit LP Limited Partnership 0%
ESP 2008 Executive Co Investment Limited Partnership Limited Partnership 0%
ESP 2008 General Partner Limited Partnership Limited Partnership 0%
ESP CPPIB European Mid Market Fund Limited Partnership 1%
ESP General Partner Limited Partnership Limited Partnership 0%
ESP Golden Bear Europe Fund Limited Partnership 3%
ESP Golden Bear General Partner Limited Partnership Limited Partnership 0%
ESP II Co Investment Limited Partnership Limited Partnership 0%
ESP II Conduit LP Limited Partnership 0%
ESP II General Partner Limited Partnership Limited Partnership 0%
ESP Tidal Reach General Partner Limited Partnership Limited Partnership 20%
ESP Tidal Reach LP Limited Partnership 1%
European Strategic Partners Limited Partnership 0%
European Strategic Partners - I LP(17) Limited Partnership 0%
European Strategic Partners 2004 'A' Limited Partnership 0%
European Strategic Partners 2004 'B' Limited Partnership 0%
European Strategic Partners 2006 'A' Limited Partnership 0%
European Strategic Partners 2006 'B' Limited Partnership 0%
European Strategic Partners 2008 'A' Limited Partnership 0%
European Strategic Partners 2008 'B' Limited Partnership 0%
European Strategic Partners II 'A' Limited Partnership 0%
European Strategic Partners II 'B' Limited Partnership 0%
European Strategic Partners II 'C' Limited Partnership 0%
European Strategic Partners II 'D' Limited Partnership 0%
European Strategic Partners II 'E' Limited Partnership 0%
European Strategic Partners Scottish 'B' Limited Partnership 0%
European Strategic Partners Scottish 'C' Limited Partnership 0%
Finimize Limited(3) Ordinary shares 100%
Flag Asia Company III, LLC(12) Limited Liability Company 100%
Flag Asia Company III, LP(12) Limited Partnership 0%
Flag Energy & Resource Company II, LLC(12) Limited Liability Company 0%
Flag Energy & Resource Company III, LLC(12) Limited Liability Company 0%
Flag Global Company, LLC(12) Limited Liability Company 0%
Flag International Company, LLC(12) Limited Liability Company 0%
Flag International Company II, LLC(12) Limited Liability Company 0%
Flag International Company III, LLC(12) Limited Liability Company 0%
Flag International Company, LP(12) Limited Partnership 0%
Flag International Company II, LP(12) Limited Partnership 0%
Flag International Company III, LP(12) Limited Partnership 0%
Flag Offshore GP, Ltd(21) Ordinary shares 100%
Flag Private Equity Company III, LLC(12) Limited Liability Company 0%
Flag Private Equity Company IV, LLC(12) Limited Liability Company 0%
Flag Private Equity Company V, LLC(12) Limited Liability Company 0%
Flag Private Equity Company VI, LLC(12) Limited Liability Company 0%
Flag Private Equity Company III, LP(12) Limited Partnership 0%
Flag Private Equity Company IV, LP(12) Limited Partnership 0%
Flag Private Equity Company V, LP(12) Limited Partnership 0%
Flag Real Assets Company LLC(12) Limited Liability Company 0%
Flag Real Estate Company II, LLC(12) Limited Liability Company 0%
Flag Real Estate Company III, LLC(12) Limited Liability Company 0%
Name of related undertaking Share class(1) % interest held(2)
Flag Squadron Asia Pacific III GP LP(11) Limited Partnership 100%
Flag Venture Company V, LLC(12) Limited Liability Company 0%
Flag Venture Company VI, LLC(12) Limited Liability Company 0%
Flag Venture Company VII, LLC(12) Limited Liability Company 0%
Flag Venture Company VIII, LLC(12) Limited Liability Company 0%
Flag Venture Company IX, LLC(12) Limited Liability Company 0%
Flag Venture Company VI, LP(12) Limited Partnership 0%
Flag Venture Company VII, LP(12) Limited Partnership 0%
Flag Venture Company VIII, LP(12) Limited Partnership 0%
Fraser Heath Financial Management Limited(3) Ordinary shares 100%
FSA III EA SPV, LP(11) Limited Partnership 0%
FSA III Pacific SPV, LP(11) Limited Partnership 0%
Griffin Nominees Limited(3) Ordinary shares 100%
Ignis Asset Management Limited Ordinary shares 100%
Ignis Cayman GP2 Limited(11) Ordinary shares 100%
Ignis Cayman GP3 Limited(11) Ordinary shares 100%
Ignis Investment Services Limited Ordinary shares 100%
Ignis Private Equity Fund LP(11) Limited Partnership 0%
Ignis Strategic Credit Fund LP(11) Limited Partnership 0%
Interactive Investor Services Limited(7) Ordinary shares 100%
Interactive Investor Services Nominees Limited(7) Ordinary shares 100%
Investor Nominees (Dundee) Limited Ordinary shares 100%
Investor Nominees Limited(7) Ordinary shares 100%
Investor SIPP Trustees Ltd(7) Ordinary shares 100%
KFAS Real Estate Limited Partnership Limited Partnership 0%
Local2Local Limited(52) Ordinary shares 60%
Moneywise Publishing Limited(7) Ordinary shares 100%
Murray Johnstone Holdings Limited(22) Ordinary shares 100%
Murray Johnstone Limited(4) Ordinary shares 100%
NASP 2006 General Partner Limited Partnership Limited Partnership 5%
NASP 2006 Special Limited Partnership Limited Partnership 0%
NASP 2008 General Partner Limited Partnership Limited Partnership 0%
NASP 2008 Special Limited Partnership Limited Partnership 0%
Next Generation Associates V, LLC(12) Limited Liability Company 0%
Next Generation Associates V, LP(12) Limited Partnership 0%
North American Strategic Partners GP, LP(53) Limited Partnership 0%
North American Strategic Partners, LP(53) Limited Partnership 0%
North American Strategic Partners 2006 LP(18) Limited Partnership 0%
North American Strategic Partners 2008 LP(18) Limited Partnership 0%
North American Strategic Partners Companion Fund LP(53) Limited Partnership 0%
North American Strategic Partners (Feeder) 2006 Limited Partnership 0%
North American Strategic Partners (Feeder) 2008 Limited Partnership Limited Partnership 0%
North East Trustees Limited(3) Ordinary A Shares 100%
Ordinary B Shares
Orion Partners CLP Inc.(54) Ordinary shares 100%
Orion Partners Services Inc.(54) Ordinary shares 100%
Ostara China Real Estate Fund LP(54) Limited Partnership 0%
Ostara Japan Fund 3 LP(54) Limited Partnership 1%
Ostara Korea GP 2 Pte. Ltd(45) Ordinary shares 100%
Ostara Korea Separate Account LP(45) Limited Partnership 0%
Ostara Partners Inc. China(54) Ordinary shares 100%
Ostara Partners Inc. Japan 3(54) Ordinary shares 100%
Parnell Fisher Child & Co. Limited(3) Ordinary shares 100%
Parnell Fisher Child Holdings Limited(3) Ordinary A Shares 100%
Ordinary B Shares
PE1 LP(4) Limited Partnership 0%
PE1A LP(4) Limited Partnership 0%
Name of related undertaking Share class(1) % interest held(2)
PE2 Carry LP(4) Limited Partnership 40%
PE2 LP(4) Limited Partnership 0%
Pearl Private Equity LP Limited Partnership 0%
Pearl Strategic Credit LP Limited Partnership 0%
Pearson Jones & Company (Trustees) Limited(3) Ordinary shares 100%
Pearson Jones Nominees Limited(3) Ordinary shares 100%
Personal Retirement Account Limited(7) Ordinary shares 100%
PGB European Buy-out Fund I SCSp(19) Limited Partnership 0%
PGB European Co-Investment Fund I SCSp(19) Limited Partnership 0%
Poinsettia Holdco LP(11) Limited Partnership 0%
PT Aberdeen Standard Investments Indonesia(55) Limited Liability Company 99%
Regent Property Partners (Retail Parks) Limited(51) Ordinary shares 100%
SG Commercial LLP(52) Limited Liability Partnership 60%
Share Limited(7) Ordinary shares 100%
Share Nominees Limited(7) Ordinary shares 100%
Sharesecure Limited(7) Ordinary shares 100%
Shin Global Investment Partners LP(11) Limited Partnership 50%
SL Capital 2016 Co-Investment GP LP Limited Partnership 5%
SL Capital 2016 Co-Investment LP Limited Partnership 5%
SL Capital ECF GP LP Limited Partnership 4%
SL Capital ESF I GP LP Limited Partnership 0%
SL Capital ESF I LP Limited Partnership 1%
SL Capital European Co-Investment B LP Limited Partnership 0%
SL Capital European Co-Investment LP Limited Partnership 0%
SL Capital Ignis Private Equity Founder LP Limited Partnership 65%
SL Capital Ignis Strategic Credit Founder LP Limited Partnership 0%
SL Capital Infrastructure Fund II Top-Up Co-Investment Fund SCSp(19) Limited Partnership 0%
SL Capital Infrastructure I GP LP Limited Partnership 100%
SL Capital Infrastructure I LP Limited Partnership 0%
SL Capital Infrastructure II LTP LP Limited Partnership 25%
SL Capital Infrastructure II SCSp(19) Limited Partnership 1%
SL Capital Infrastructure Secondary I GP LP Limited Partnership 25%
SL Capital Infrastructure Secondary I LP Limited Partnership 0%
SL Capital Infrastructure Secondary II LP Limited Partnership 0%
SL Capital NASF I A LP Limited Partnership 2%
SL Capital NASF I Carry LP Limited Partnership 0%
SL Capital NASF I GP LP Limited Partnership 0%
SL Capital NASF I LP(12) Limited Partnership 0%
SL Capital Partners (US) Limited(56) Ordinary shares 100%
SL Capital Pearl Private Equity GP LP Limited Partnership 0%
SL Capital Pearl Strategic Credit GP LP Limited Partnership 1%
SL Capital SOF I Feeder LP Limited Partnership 0%
SL Capital SOF II Feeder LP Limited Partnership 1%
SL Capital SOF III Feeder LP Limited Partnership 0%
SL Capital SOF I GP LP Limited Partnership 0%
SL Capital SOF II GP LP Limited Partnership 0%
SL Capital SOF III GP LP Limited Partnership 0%
SL Capital SOF I LP Limited Partnership 0%
SL Capital SOF II LP Limited Partnership 0%
SL Capital SOF III LP Limited Partnership 0%
SLC EC I Executive Co Investment Limited Partnership Limited Partnership 0%
SLCI I Executive Co Investment Limited Partnership Limited Partnership 0%
SLCI II Executive Co-Investment LP Limited Partnership 0%
SLCI Rail Co-Invest LP Limited Partnership 0%
SLCP 2016 Co-Investment LP Limited Partnership 0%
SLCP (Founder Partner Ignis Private Equity) Limited Ordinary shares 100%
SLCP (Founder Partner Ignis Strategic Credit) Limited Ordinary shares 100%
Name of related undertaking Share class(1) % interest held(2)
SLCP (General Partner) Limited Ordinary shares 100%
SLCP (General Partner II) Limited Ordinary shares 100%
SLCP (General Partner 2016 Co-investment) Limited Ordinary shares 100%
SLCP (General Partner CPP) Limited Ordinary shares 100%
SLCP (General Partner EC) Limited Ordinary shares 100%
SLCP (General Partner Edcastle) Limited Ordinary shares 100%
SLCP (General Partner ESF I) Limited Ordinary shares 100%
SLCP (General Partner ESF II) Limited Ordinary shares 100%
SLCP (General Partner ESP 2004) Limited Ordinary shares 100%
SLCP (General Partner ESP 2006) Limited Ordinary shares 100%
SLCP (General Partner ESP 2008 Coinvestment) Limited Ordinary shares 100%
SLCP (General Partner ESP 2008) Limited Ordinary shares 100%
SLCP (General Partner ESP CAL) Limited Ordinary shares 100%
SLCP (General Partner Europe VI) Limited Ordinary shares 100%
SLCP (General Partner Infrastructure I) Limited Ordinary shares 100%
SLCP (General Partner Infrastructure Secondary I) Limited Ordinary shares 100%
SLCP (General Partner NASF I) Limited Ordinary shares 100%
SLCP (General Partner NASP 2006) Limited Ordinary shares 100%
SLCP (General Partner NASP 2008) Limited Ordinary shares 100%
SLCP (General Partner Pearl Private Equity) Limited Ordinary shares 100%
SLCP (General Partner Pearl Strategic Credit) Limited Ordinary shares 100%
SLCP (General Partner SOF I) Limited Ordinary shares 100%
SLCP (General Partner SOF II) Limited Ordinary shares 100%
SLCP (General Partner SOF III) Limited Ordinary shares 100%
SLCP (General Partner Tidal Reach) Limited Ordinary shares 100%
SLCP (General Partner USA) Limited Ordinary shares 100%
SLIPC (General Partner Infrastructure II LTP 2017) Limited Ordinary shares 100%
SLIPC (General Partner Infrastructure II) S.a.r.l.(19) Ordinary shares 100%
SLIPC (General Partner Infrastructure III) S.à r.l.(19) Ordinary shares 100%
SLIPC (General Partner PMD Co-Invest 2017) Limited Ordinary shares 100%
SLIPC (General Partner SCF 1) Limited Ordinary shares 100%
SLTM Limited Ordinary shares 100%
SOF I Executive Co Investment Limited Partnership Limited Partnership 0%
SOF II Executive Co Investment Limited Partnership Limited Partnership 0%
SOF III Executive Co Investment Limited Partnership Limited Partnership 0%
SOF IV Carry LP Limited Partnership 25%
SOF IV Executive Co Investment Limited Partnership Limited Partnership 0%
Squadron Asia Pacific Fund, LP(11) Limited Partnership 0%
Squadron Asia Pacific Fund II, LP(11) Limited Partnership 0%
Squadron Capital Asia Pacific GP, LP(11) Limited Partnership 100%
Squadron Capital Asia Pacific II GP LP(11) Limited Partnership 100%
Squadron Capital Partners Limited(11) Ordinary shares 100%
Squadron GP Participation, LP(11) Limited Partnership 0%
Squadron GP Participation II, LP(11) Limited Partnership 0%
Standard Life Investments Brent Cross General Partner Limited Ordinary shares 100%
Standard Life investments Brent Cross LP Limited Partnership 0%
Standard Life Investments Commercial Real Estate Debt LP(3) Limited Partnership 0%
Standard Life Investments European RE Club (Offshore Feeder) Ltd(11) Ordinary shares 100%
Standard Life Investments European RE Club II (Offshore Feeder) Ltd(11) Ordinary shares 100%
Standard Life investments European Real Estate Club LP(3) Limited Partnership 2%
Standard Life Investments European Real Estate Club II LP(3) Limited Partnership 1%
Standard Life Investments European Real Estate Club III LP(3) Limited Partnership 2%
Standard Life Investments (General Partner CRED) Limited(3) Ordinary shares 100%
Standard Life Investments (General Partner ELIREF) S.a.r.l.(19) Ordinary shares 100%
Standard Life Investments (General Partner EPGF) Limited Ordinary shares 100%
Standard Life Investments (General Partner European Real Estate Club) Ordinary shares 100%
Limited(3)
Name of related undertaking Share class(1) % interest held(2)
Standard Life Investments (General Partner European Real Estate Club II) Ordinary shares 100%
Limited(3)
Standard Life Investments (General Partner European Real Estate Club III) Ordinary shares 100%
Limited(3)
Standard Life Investments (General Partner GARS) Limited Ordinary shares 100%
Standard Life Investments (General Partner GFS) Limited Ordinary shares 100%
Standard Life Investments (General Partner Global Tactical Asset Allocation) Ordinary shares 100%
Limited
Standard Life Investments (General Partner MAC) Limited Ordinary shares 100%
Standard Life Investments (General Partner UK Shopping Centre Feeder Fund LP) Ordinary shares 100%
Limited(3)
Standard Life Investments (Mutual Funds) Limited(22) Ordinary shares 100%
Standard Life Investments UK Shopping Centre Feeder Fund Company Limited(57) Ordinary shares 100%
Standard Life Savings Nominees Limited Ordinary shares 100%
Tenon Nominees Limited(4) Ordinary shares 100%
The Lighthouse Living Co Limited Ordinary shares 75%
The Munro Partnership Ltd Ordinary shares 100%
The Share Centre (Administration Services) Ltd(7) Ordinary shares 100%
The Share Centre Limited(7) Ordinary shares 100%
Touchstone Insurance Company Limited(58) Ordinary shares 100%
TPIF (No. 1) GP LLP(59) Limited Liability Partnership 60%
TPIF (No. 1) LP(59) Limited Partnership 0%
TPIF (Portfolio No. 1) GP LLP(52) Limited Liability Partnership 60%
TPIF (Portfolio No. 1) LP(52) Limited Partnership 0%
TPIF (Portfolio No. 1) Nominee Limited(52) Ordinary shares 60%
Tritax Aberdeen HQ Office (General Partner) Limited(52) Ordinary shares 60%
Tritax Aberdeen HQ Office Limited Partnership(60) Limited Partnership 0%
Tritax abrdn Supply Chain GP LLP(52) Limited Liability Partnership 60%
Tritax Assets LLP(52) Limited Liability Partnership 60%
Tritax LMR Carry GP LLP(59) Limited Liability Partnership 60%
Tritax LMR Carry Limited Partnership(59) Limited Partnership 7%
Tritax Management LLP(3) Limited Liability Partnership 60%
Tritax PowerBox Limited(52) Ordinary shares 60%
Tritax Securities LLP(52) Limited Liability Partnership 60%
Two Rivers One Limited(24) Ordinary shares 100%
Two Rivers Two Limited(24) Ordinary shares 100%
UK PRS Opportunities General Partner Limited(3) Ordinary shares 100%
UK PRS Opportunities LP(3) Limited Partnership 0%
VZWL Bestandsimmobilien GmbH & Co geschlossene Investment KG(38) Limited Partnership 0%
VZWL Private Equity GmbH & Co geschlossene Investment KG(38) Limited Partnership 0%
Waverley Healthcare Private Equity Limited(4) Ordinary shares 100%
(c) Associates and joint ventures
Name of related undertaking Share class(1) % interest held(2)
Aberdeen Standard SICAV I - Europe ex UK Sustainable Equity Fund(19) SICAV 25%
abrdn OEIC I - abrdn (AAM) Sterling Government Bond Fund(3) OEIC 25%
Archax Holdings Limited(61) Ordinary shares 10%
Concession Infrastructure Investments Manager Limited(62) Ordinary shares 50%
Criterion Tec Holdings Ltd(63) Ordinary shares 21%
Heng An Standard Life Insurance Company Limited(64) Ordinary shares 50%
PURetail Luxembourg Management Company S.a.r.l.(65) Class A shares 50%
Tenet Group Limited(66) Ordinary B Shares 25%
Virgin Money Unit Trust Managers Limited(67) Ordinary shares 50%
1. OEIC = Open-ended investment company
SICAV = Société d'investissement à capital variable
ETF = Exchange traded fund
2. Limited Partnerships or limited liability companies in which the Group
has no interest but whose general partner or manager is controlled by the
Group are considered subsidiaries under Companies Act 2006. Where the Group
has no interest in a limited partnership or limited liability company that is
considered a subsidiary, the interest held is disclosed as 0%.
Registered offices
3. 280 Bishopsgate, London, EC2M 4AG
4. 10 Queens Terrace, Aberdeen, AB10 1XL
5. c/o IQ EQ Fund Services (Mauritius) Ltd, 33 Edith Cavell Street, Port
Louis, 11324, Mauritius
6. PO Box 19, Martello Court, Admiral Park, St Peter Port, GY1 3HB,
Guernsey
7. 201 Deansgate, Manchester, M3 3NW
8. Cranford House, Kenilworth Road, Blackdown, Leamington Spa, CV32 6RQ
9. 2nd Floor, The Royals, Altrincham Road, Sharston, Manchester M22 4BJ
10. 2-8 avenue Charles De Gaulle, L-1653 Luxembourg, Luxembourg
11. c/o Maples Corporate Services Limited ,Ugland House, P.O. Box 309, Grand
Cayman, KY1-1104, Cayman Islands
12. c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, DE,
19808, USA
13. Bangkok City Tower, 28th Floor, 179 South Sathorn Road, Thungmahamek,
Sathorn, Bangkok, 10120, Thailand
14. Strandvejen 171,3, 2900 Hellerup, Denmark
15. c/o Aatsto DLA Piper Finland Oy, Fabianinkatu 23, FI-00130 Helsinki,
Finland
16. Office Unit 8, 6th Floor, Al Khatem Tower, Abu Dhabi Global Market
Square, Al Marya Island, PO Box 764605, Abu Dhabi, United Arab Emirates
17. c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, Wilmington, DE, 19801, USA
18. c/o Corporation Service Company, 2711 Centerville Road, Suite 400,
Wilmington, DE, 19808, USA
19. 35a Avenue John F. Kennedy, L-1855 Luxembourg, Luxembourg
20. Western Suite, Ground Floor Mill Court, La Charroterie, St Peter Port,
Guernsey, GY1 1EJ
21. c/o Mourant Governance Services (Cayman) Limited; 94 Solaris Avenue,
Camana Bay, PO Box 1348; Grand Cayman KY1-1108, Cayman Islands
22. 7 Exchange Crescent, Conference Square, Edinburgh, EH3 8AN
23. Box 3039, Stockholm, 103 63, Sweden
24. Level 1, 1FC1, Esplanade, St Helier, JE2 3BX, Jersey
25. Harju maakond, Tallinn, Kesklinna linnaosa, Ahtri tn 6a, 10151, Estonia
26. 2 Boulevard de la Foire, L-1528 Luxembourg, Luxembourg
27. WTC, H-Tower, 20th Floor, Zuidplein 166, 1077 XV Amsterdam, Netherlands
28. One London Wall, London, EC2Y 5AB
29. Level 10, 255 George Street, Sydney, NSW 2000, Australia
30. 712 5th Ave, New York, NY 10019, USA
31. 8F-1, No. 101, Songren Road, Taipei City, 110, Taiwan, Republic of China
32. 21 Church Street, #01-01, Capital Square Two, 049480, Singapore
33. Rua Joaquim Floriano, 913 - 7th floor - Cj. 71, Itaim Bibi, São Paulo,
04534-013, Brasil
34. 1 First Canadian Place, 100 King Street West, Toronto, Ontario, Canada
35. 1st Floor, Sir Walter Raleigh House, Esplanade, St Helier, JE2 3QB,
Jersey
36. AC 82 NO. 10 60 P 5 Bogota DC, Columbia
37. 6th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong
38. Bockenheimer Landstrasse 25, 60325 Frankfurt am Main, Germany
39. 2-4 Merrion Row, Dublin 2, D02 WP23, Ireland
40. Schweizergasse 14, Zurich, 8001, Switzerland
41. Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing No.1, Leboh Ampang 50100
Kuala Lumpur, Malaysia
42. Otemachi Financial City Grand Cube 9F, 1-9-2 Otemachi, Chiyoda-ku,
Tokyo, 100-0004, Japan
43. 44 Esplanade, St Helier, Jersey, JE4 9WG
44. 13th Fl., B Tower (Seocho-dong, Kyobo Tower Building), 465,
Gangnam-daero, Seocho-gu, Seoul, Korea
45. 80 Robinson Road, #02-00, 068898, Singapore
46. West Area, 2F, No.707 Zhangyang Road, China (Shanghai) Pilot Free Trade
Zone
47. 29 Rue De Berri, Paris, 75008, France
48. 2-4, Rue Eugène Ruppert, L-2453 Luxembourg, Luxembourg
49. 1900 Market St, Suite 200, Philadelphia, PA 19103, USA
50. Box 16285, Stockholm, 103 25, Sweden
51. 30 Finsbury Square, London, EC2A 1AG
52. 3rd Floor, 6 Duke Street St James's, London, SW1Y 6BN
53. RL&F Service Corp., 920 N King St FL 2, Wilmington, New Castle, DE,
19801, USA
54. Campbells Corporate Services Limited, 4th Floor, Willow House, Cricket
Square, Grand Cayman, KY1-9010, Cayman Islands
55. 16th Floor, Menara DEA Tower 2, 16th Floor, Kawasan Mega Kuningan, Jl
Mega Kuningan Barat Kav. E4.3 No. 1-2, 12950 Jakarta, Indonesia
56. 7 Conference Square, Edinburgh, EH3 8AN
57. Ogier House, Esplanade, St Helier, JE4 9WG, Jersey
58. c/o Aon, PO Box 33, Maison Trinity, Trinity Square, St Peter Port,
Guernsey GY1 4AT
59. 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ
60. DWF LLP, 110 Queen Street, Glasgow, G1 3HD
61. 4th Floor, 1 Old Jewry, London, EC2R 8DN
62. c/o Paget-Brown Trust Company Ltd, Boundary Hall, Cricket Square, P.O.
Box 1111, Grand Cayman, KY1-1102, Cayman Islands
63. 7 Lochside View, Edinburgh, EH12 9DH
64. 18F, Tower II, The Exchange, 189 Nanjing Road, Heping District, Tianjin,
People's Republic of China, 300051
65. 80, route d'Esch, L-1470 Luxembourg, Luxembourg
66. 5 Lister Hill, Horsforth, Leeds LS18 5AZ
67. Jubilee House, Gosforth, Newcastle-Upon-Tyne, NE3 4PL
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