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Aberdeen Asset Management has seen the outflow of funds continue, although it has slowed so far this year.

Its directors believe that investor confidence is returning to emerging markets, where it has focused its attention.

The company, which is preparing for merger with Standard Life, reported half-year profits up 15% to £115m, on revenue of £535m, up by 10%.

Its assets under management slipped to £308bn at the end of March.

That is down by £4bn since last September.

In the last three months of 2016, there was a net outflow of funds of £10.5bn. There was a stalling in the wake of the US presidential election.

In the first three months of 2017, that slowed to a net outflow of funds under management of £2.9bn.

Emerging markets

Behind those figures was a shift in assets of £22.7bn of assets attracted into Aberdeen Asset Management, while £36.1bn flowed out.

Martin Gilbert, chief executive, told ����ý Radio's Good Morning Scotland programme: "We have seen a big change in sentiment in the last three months towards the areas that we specialise in. We have seen outflows over the past four years in those areas, so it's a welcome return.

"People see values in emerging markets, especially India. Developed markets are probably higher than people would like them to be. So people are allocating assets to emerging markets and emerging market debt."

Asked about pension reforms being debated in the context of the Westminster election, the chief executive said: "Our plea is to stop tinkering with the pensions system and have a period of stability, so that people know what the rules are.

"The rules change so often people don't know how much they can put towards pensions, and therefore they don't save for their retirements".

'Retention pool'

The merger with Standard Life, based in Edinburgh, is due to see the prospectus published next week. "Everything is going to plan - in fact, slightly ahead of plan," Mr Gilbert said.

A large bonus pot, reported to be more than £30m, has been put aside by the two companies, as an incentive to keep the most valuable fund managers at their offices in Edinburgh, London and Aberdeen.

The Aberdeen boss explained: "The key criticism we get on mergers such as this are from the clients who ask: what is the benefit to us of doing a transaction such as this?

"Obviously, size gives us the ability to retain star fund managers. But one of the things that causes great uncertainty is what is going to happen to these managers during the merger. So it's very normal to put in a retention pool to make sure people stay during this period, and stay up to two years.

"Within an £11bn merger, where a large percentage of the asset is the people who manage the money, it's a very, very important component as far as our clients are concerned."