Aberdeen Asset Management - International Investment Management

Aberdeen Asset Management PLC is a UK-based international investment management group, managing assets for both institutions and private individuals from offices around the world. Aberdeen’s mission is to deliver superior performance across diverse asset classes in which it believes it has a sustainable competitive edge.

Listed on the London stock exchange, Aberdeen manages currency and fixed income and equities (quoted and private) in segregated, closed and open-ended pooled structures. Aberdeen also runs a sizeable European property business.

ACTIVE FUND MANAGMENT

Aberdeen’s house style is fundamental and process-driven. Active management is the bedrock of the Aberdeen equity process; a similar approach characterises currency and fixed income management, with alpha generated by identifying market inefficiencies. In property, the focus is on high risk adjusted returns through advanced portfolio modelling and, again, active management.

Aberdeen prides itself on original thinking and research, and believes strongly in portfolio transparency. Implicit in the company’s style is a rejection of commoditised products and closet indexing; Aberdeen’s business therefore stands or falls on whether it can genuinely add value to client wealth.

Aberdeen operates as an independent company, free of the conflicts of interest that can affect integrated financial groups. Although the company is publicly quoted, management and staff are significant owners of the business. Fund management is all that Aberdeen does.

CURRENCY AND FIXED INCOME

The Aberdeen currency and fixed income process approach emphasizes proprietary research, the identification of investment opportunities with attractive risk-reward characteristics, a strategy of combining multiple non-correlated investment decisions with risk monitoring, and management & control at all stages of the investment process. Aberdeen’s global client base invests in a range of local, global and specialist currency and fixed income and multi-alpha strategies.

Aberdeen’s aim is to add value by exploiting market inefficiencies in the areas of relative value, credit, interest rate and currency management. Aberdeen’s use of derivatives also allows it to separate sources of risk and return, and construct funded or unfunded investment strategies.

LIABILITY-DRIVEN INVESTMENT (LDI)

Many pension funds are faced with a dilemma. Fund assets have decreased due to the fall in equity markets. Pension liabilities have increased due to the fall in bond yields and improved longevity. At the same time regulatory and accounting changes have placed renewed pressure on pension funds to match more closely their assets to their liabilities. Aberdeen’s innovative liability-driven investment approach is designed to help pension funds to do this, while at the same time earning sufficient returns to close funding deficits.

EQUITIES

The Aberdeen equity process emphasizes a team approach, original research, the identification of businesses that can be understood and the elimination of downside risks through price disciplines.

Aberdeen believes business fundamentals drive equity returns over the long term. It aims to add value by identifying good quality securities, defined chiefly in terms of management and business model, which are attractively priced. Stock selection is the key source of equity alpha. Benchmarks are downplayed in portfolio construction as they provide little clue to future performance. Aberdeen’s equity managers always visit companies before investing, and if a security fails its screens, Aberdeen will not own it, irrespective of the security’s index weight. Aberdeen rarely focuses on short-term returns and its equity strategies are simple: buy-and-hold; add on the dips; take profits on price run-ups. This reduces transaction costs and keeps portfolios focused.

PROPERTY

Aberdeen’s approach to property investments is to generate superior returns through a better understanding of the dynamics of property markets and realise the potential of individual property assets. A structured investment management process, underpinned by best-in-class research of the European property markets, has delivered consistent out-performance through a comprehensive range of investment vehicles and mandates.