Experienced hands and fresh minds: the Aberdeen way

With €457bn AUM and offices in 18 cities across the continent, Aberdeen Asset Management has been shaping its business in Europe since 1983.

With offices spanning Aberdeen, Amsterdam, Budapest, Copenhagen, Edinburgh, Frankfurt, Geneva, Helsinki, Jersey, London, Luxembourg, Madrid, Milan, Oslo, Paris, Stockholm and Zurich, Aberdeen is one of the most prevalent, and biggest, players in the asset management space in Europe.

From its beginning the company has taken pride in having valued a culture of openness, mutual dependency and collective purpose, explains John Brett, global head of Distribution.

“We organise our investment managers in teams, so every one of them has a voice.

“And by following investment processes that are clear, systematic and where all information is shared, we think this leads to better outcomes than if a star fund manager were in charge.

“We strongly believe that the combination of experienced hands and fresh minds invigorates our thinking and can lead to better performance. That’s true in every aspect of our business – not just our investment teams,” he says.

With Scottish roots, comes a natural degree of scepticism that makes Aberdeen’s managers steer clear from what markets simply say and pushes them to dig further, according to Brett.

“Our skill as investment managers lies in our willingness to ask questions, to buck consensus if need be and do our own research to arrive at clear judgements. This attitude informs how we approach our business overall. We encourage everyone to think afresh and not to do something just because ‘that’s the way it has always been done’,” Brett explains.

The €457bn AUM is at present split between Aberdeen Solutions (multi-asset, alternatives and quantitative) (38.7%), equities (32.9%), fixed income (22.3%), and a remaining 6.1% in property.

ORGANIC GROWTH AND SELECTIVE ACQUISITIONS
Looking back at the company’s history and its path to gain its current position in the asset management industry globally, Brett says that the key to success has been “a mix of organic growth and selective acquisitions.”

“Without one we couldn’t have done the other. The acquisitions of Aitken Hume in 1988 which brought Hugh Young, our global head of Equities, Murray Johnstone in 2000 and Edinburgh Fund Managers in 2003 played a key role in bringing people in to help build our highly regarded equity capabilities: Asia Pacific, emerging markets and global equities.”

“However, they came in and worked with existing Aberdeen people to develop our fundamental long-term investment approach. Furthermore the growth in assets under management of these three strategies – combined over €130bn – has been largely organic.”

“That said whilst the acquisition of some of Deutsche’s asset management businesses in 2005 consisted mainly of fixed income and multi-asset portfolios, it did promote us as a global institutional manager helping us to market our equity capabilities.

“Similarly a key driver behind our recent acquisition of Scottish Widows Investment Partnership (SWIP) was to enhance our existing fixed income, solutions and property capabilities. With them now strengthened we are now looking to grow them organically,” Brett says.

Following the SWIP acquisition, Aberdeen expects future growth to come from multi-asset, alternatives, solutions and global fixed income.

“As well as our historic strength of active equities. Our fixed income, alternatives and solutions capabilities were all substantially enhanced post the integration of SWIP,” Brett adds.

NEW PRODUCTS, NEW MARKETS?
Brett says Aberdeen is constantly looking for innovation as well as at how to meet the changing needs of investors. “Our product development in the foreseeable future is likely to revolve around alternatives, multiasset and the building blocks for our solutions business,” he adds.

However, with a footprint already in 26 countries, including 13 European ones, Brett rules out further major expansion.

“We would not expect to expand into any new markets in the near term, but are selectively strengthening further our presence in the Middle East,” he says.

Looking ahead, the focus is to grow the business much more around offering a broader range of funds.

“Our newly acquired capabilities from SWIP are well represented in our UK range but lack vehicles marketable further afield,” Brett concludes.