Standard Life Aberdeen's fund management arm's assets fall 2 percent

LONDON (Reuters) - Standard Life Aberdeen's <SLA.L> fund arm's assets under management dropped two percent in the first nine months of 2017, it said on Friday, following a cautious reception among investors to its recent merger.

Rival Scottish fund managers Standard Life and Aberdeen Asset Management joined forces earlier this year in an 11 billion pound ($14.78 billion) deal, one of several mergers globally of active asset managers in an attempt cut costs.

"Where we've seen probably the effect of the merger is that people are not funding things yet, they are waiting to see how the funds settle down," co-chief executive Martin Gilbert told a media call.

Assets under management at Aberdeen Standard Investments, the fund management business, dropped by 10.9 billion pounds to 569.7 billion pounds at end-September, the company said in its first update since the merger.

Multi-asset funds, including the firm's flagship Global Absolute Return Strategy (GARS), reported net outflows of 5.6 billion pounds.

The company has said it might sell its 16 billion pound book of annuities that are closed to new customers, but co-chief executive Keith Skeoch said no decision had been made.

"We are very, very focussed on value and we are patient," he said.

The firm's overall assets under administration were steady at 646.2 billion pounds at end-Sept, from 647.6 billion at end-2016.

Analysts at JP Morgan Cazenove said net flows for the company were "broadly consistent" with their estimates, reiterating their "overweight" rating on the stock.

Standard Life Aberdeen's shares rose 0.17 percent to 415.6 pence at 0820 GMT, compared with a 0.12 percent drop in the FTSE 100 index <.FTSE>.

(Reporting by Carolyn Cohn, editing by Huw Jones and Jane Merriman)