Martin Gilbert steps down from Abrdn funds’ board over conflicts of interest

City grandee Martin Gilbert has been asked to step down from the board of two major funds run by Abrdn because of potential “conflicts of interest”.

Abrdn, which was relegated from the FTSE 100 last month, said Gilbert had left his role at two Luxembourg-based funds called Sicavs, which form an umbrella for many of the company’s individual funds, because of his other positions in the asset management industry.

Gilbert, who co-founded Abrdn in 1983 as Aberdeen Asset Management, is chair of AssetCo, an investment firm that acquires other fund managers.

However, Abrdn denied claims that Gilbert’s departure was the result of issues relating to the Luxembourg funds’ anti-money laundering processes.

The Sunday Times reported that the Luxembourg regulator, the Commission de Surveillance du Secteur Financier, had questioned historic deficiencies on that issue that came to light following an audit.

The problem is said to have stemmed from Abrdn’s failure to obtain certain documents from clients in the two Sicav funds, the structure holding many of Abrdn’s bond products. This led to a number of customer accounts being frozen.

Abrdn said: “We are working with a small number of clients in our Luxembourg business to resolve a historic issue relating to documentation. We maintain a routine of regular engagement with the relevant regulators who have been kept informed throughout.”

The fund manager went on: “Contrary to the recent media report, Mr Gilbert was requested to step down from both Abrdn’s . . . Luxembourg fund boards due to potential conflicts of interest given his involvement with businesses that compete with Abrdn and funds managed by it.”

The company added that Gilbert had earlier this year also left the boards of similar fund structures run by Abrdn in the US.

Gilbert has been approached for a comment.

The Sunday Times also reported complaints of the behaviour at Abrdn under chief executive Stephen Bird, who took on the role in late 2020.

In an internal memo sent to staff at Abrdn on Sunday seen by the Financial Times, Bird said: “We did explain that since my arrival, we had made no secret of the fact that to execute our plans, grow our business and create a performance culture, we needed to make changes which regrettably included parting company with a number of senior colleagues.

“Whilst most have left us on good terms and gone on to new roles in other organisations, there will always be a small minority who feel differently.”

Bird added that the performance of Abrdn’s share price, which has fallen 45 per cent so far this year, should be seen in “the context of an asset management sector that has de-rated globally and markets operating in some of the most challenging macroeconomic conditions for many decades”.

He added: “We are not alone in suffering a major share price fall among listed asset managers in these conditions.”