Three years ago Martin Gilbert was still trying to shake off his association with split-capital investment trusts.

The scandal, described by the Financial Services Authority as the worst case of mis-selling it had ever encountered, left the reputations of 21 fund managers and brokers, including Mr Gilbert's Aberdeen Asset Management, badly tarnished.

One of Aberdeen's trusts, which had invested in non-dividend paying preference shares issued by split trusts, was described by the company as “the one-year-old that lets you sleep at night”.

In the end, it led to heavy losses for 7,000 investors. After some bitter dogfights, Aberdeen was forced to agree an £81 million settlement against split-caps, some £35 million of it for that one trust.

Mr Gilbert had to shelve his previously acquisitive growth ambitions and even abandoned a planned name change because of concerns this would be seen as a cynical ploy.

Yesterday's deal to buy Credit Suisse's traditional fund management arm, is further proof that Aberdeen has put the episode behind it.

After the acquisition, Mr Gilbert will be chief executive of the UK's biggest independent fund manager, with funds under management of more than £150 billion.

In a sector that is expected to consolidate rapidly this year, Mr Gilbert says Aberdeen stands ready to make further acquisitions. It would be no surprise to see other hard-pressed banks ditching their fund management arms.

Not that they will get a good price for them. Aberdeen is paying just 0.625 per cent of Credit Suisse's funds under management. Aberdeen shares jumped 15 per cent in celebration.

In the boom times, asset managers were commanding prices of up to 3 per cent of their managed assets.

It echoes the bargain-basement price of less than $100 million paid last month by GLG Partners, the hedge fund, for the $8.2 billion asset management arm of Société Générale, the French bank.

Fund managers are likely to stay cheap this year, as falling markets and departing investors keep profits under pressure.

Mr Gilbert may even salvage something out of the mess at New Star Asset Management, John Duffield's stricken manager.

Mr Duffield was also caught up in the split-caps scandal. But he did not handle the past three years as well as his old friend.

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