Aberdeen Overview


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Aberdeen Overview

  1. 1. EQUITIES | FIXED INCOME | PROPERTY Aberdeen Asset Management Group overview At Aberdeen, asset management is our business. We operate independently and only manage assets for third parties, allowing us to focus solely on their needs, without conflicts of interest. We now manage e160 billion of third party assets from our offices around the world. Our clients access our investment expertise across the three asset classes: equities, fixed income and property. We package our skills in the form of segregated and pooled products across borders. We invest worldwide and follow a predominantly long-only approach, based on fundamentally sound investments – we do not chase market fads. Our investment teams are based in the markets or regions in which they invest. Clients understand our process and portfolios because they are transparent. aberdeen-asset.com Q4/09
  2. 2. Equities • Bottom-up investment style, emphasising company fundamentals • Team approach, with asset managers based in the regions where we invest • low portfolio turnover, buying stocks and holding them for the long term • First-hand research is central to our process • No investment without interviewing the company’s management first Aberdeen’s mainstream equity process dates from the early 1990s and we believe its advantage lies in the consistency of its approach, irrespective of market conditions. From the company visits and analysis carried out regionally, through to portfolio construction decisions, we adopt a team approach. Cross-coverage of securities locally ensures objectivity; we avoid cultivating ‘star’ managers. Diversification at the stock level is our main control of risk. We aim to add value by capitalising on original research. We see equity risk in terms of investing in a poor quality company, or overpaying for a good one. Equity investment process Equities breakdown Company visit note Risk UK North America controls €3.5bn €2.4bn Specialist equities STEP STEP STEP €5.3bn 1 2 3 Asia Pacific Global/ €19.4bn EAFE Quality Aberdeen Price Portfolio €10.7bn Pass or fail? universe Cheap or construction expensive Global Europe Potential Watchlist/ Monitor emerging markets €1.5bn revisit review €12.6bn Total €55.4bn As at 30 September 2009 Source: Aberdeen Asset Managers limited Active management Long-term focus We aim to add value by identifying good Our mainstream strategies are simple; quality stocks, defined chiefly in terms of we buy and hold, add on price dips and management and business model, which take profits on price rises. This reduces are attractively priced. Good stockpicking is transaction costs and keeps portfolios the key to our performance. We downplay focused. We rarely pursue short-term benchmarks in portfolio construction returns for mainstream equity strategies, since these provide little clue to future albeit for specialist portfolios, activity may performance. Our asset managers avoid be more dynamic. businesses that we do not understand or those with discriminatory shareholder Team approach structures. We employ around 110 equity investment professionals globally. Proprietary research Portfolio decisions are made Our mainstream equity managers always collectively, and we avoid cultivating visit companies before investing, making ‘star’ fund managers. Cross-coverage thousands of visits annually to existing of securities also increases objectivity and prospective holdings. Every contact is and lessens reliance on individuals. documented in detail. If a security fails our screens, we will not own it, irrespective of its index weight.
  3. 3. Fixed income • Active management, operating globally, in a transparent and accountable structure • Belief that multiple sources of added value improve the risk-return profile • Specialist teams working independently within their area of expertise • local presence in london, Philadelphia, Singapore and Sydney • Strong derivatives capability to assist implementation of both active and liability matching strategies Aberdeen’s fixed income process dates back to the 1980s. Our alpha teams are responsible for generating investment strategies within their specialist areas, while our product teams are responsible for allocating and monitoring risk budgets, tailoring investment strategies for individual portfolios and are accountable for overall performance. Fixed income investment process Fixed income breakdown 1 2 Money market Emerging markets Portfolio Manager Product Team €14.8bn €2.7bn Agree client risk Sets client Convertibles Europe and return investment €0.7bn €5.7bn requirements strategy Asia Pacific Currency €10.2bn overlay €1.7bn Evaluating risk Global at every step €9.6bn 4 3 High yield Product Alpha €0.8bn Team Teams US UK €11.0bn Risk budgeting, Idea generation €14.2bn review and in an unconstrained oversight universe Total €71.4bn As at 30 September 2009 Source: Aberdeen Asset Managers limited Active management Team approach We aim to add value by exploiting market We employ over 130 investment inefficiencies in interest rates, currency, professionals across our teams. They invest investment grade credit, emerging market within clearly delineated parameters, debt and high yield. We have dedicated with defined reporting lines. Our team portfolio managers and analysts in the structure is based on transparency and three main time zones. They operate as accountability. close-knit teams, with investment decision- making devolved to specialists, based on Diverse solutions their knowledge and expertise. Many clients are moving to higher performance or core plus mandates. Flexible and disciplined Another trend is the move away from investment process market-based indices and the use of Our investment structure enables us not liability driven benchmarks. We aim to only to follow a disciplined investment deliver performance across the full range of process but also to be flexible to manage our fixed income capabilities. We also use portfolios for a wide variety of client derivatives, such as interest rate and credit requirements. This may range from default swaps, to add value and also to strategies which employ multiple sources match liability exposures. of uncorrelated returns to those that are focused on a particular specialist area.
  4. 4. Property • An active property investment manager • Unrivalled local presence in key international markets • Separate accounts and collective funds, including funds-of-funds • Disciplined investment process, supported by research on the ground • Team approach, with managers based in the regions where we invest We offer a wide range of well-structured property investment vehicles that provide strong risk-adjusted returns and a choice of geographic and sector allocation. In addition to funds holding direct property, Aberdeen has pioneered the development of funds of property funds, with exposure to Continental Europe and Asia. Active management, top-class research, local presence and a rigorous investment process are the means by which we add value to property investment. Property investment process Property breakdown Other €0.4bn Forecasts Investment Investment Asia & Relative A Strategy Plan Sele sset €0.6bn UK Pricing cti o €6.4bn n Review Transactions Nordic €7.2bn e Continental & at nnan T l Re et nt Allocation io n t Ass eme Eastern Europe ship g Selection Mana €10.2bn Management Total €24.8bn As at 30 September 2009 Source: Aberdeen Asset Managers limited Active management Structured investment process Our understanding of the factors that drive Our proven investment process links the returns stems from our local presence and three essential disciplines of allocation, our dedicated research capability. A unique selection and asset management. We apply feature of property is the value that can be it rigorously to all property sectors and added by active asset management, and geographies. Our principle is to combine selecting assets with this potential enables advanced top-down research with a a skilful investment manager to create pragmatic, but structured, bottom-up alpha and outperform the market. approach from our local professionals. The former focuses on managing beta, or Local presence portfolio risk, the latter on creating alpha. Active property investment requires a local presence. We have expanded in Europe’s Delivering risk-adjusted returns heartland and, through our Singapore We aim to help our institutional clients office, into Asia. We now number some achieve well diversified property exposure 600 professionals based in 13 countries. by delivering superior risk-adjusted returns This unrivalled local reach is essential to through funds that offer a clear choice of our understanding of local markets and our geographic or sectoral exposure. With our commitment to local decision making. advanced portfolio modelling techniques, we provide an understanding of the risk of different property investments and their place in multi-asset portfolios.
  5. 5. BRITISh ISlES CONTINENTAl EUROPE AMERICAS • Aberdeen (head office) • Amsterdam • Philadelphia • Edinburgh • Brussels • São Paulo • Glasgow • Budapest • Toronto • Jersey • Copenhagen Philadelphia, PA is our • london • Frankfurt hub for North America As our home market, we • Geneva and includes fixed income have several offices around • helsinki the British Isles. By AuM, • luxembourg and US equity teams. We • Milan manage over e24.2 billion 29% of our clients are • Oslo on behalf of US clients. based in the British Isles, • Paris Philadelphia is also the accounting for e45.9 • Stockholm base for US client servicing billion. The city of Aberdeen • St Petersburg and consultant relations is our headquarters, and where we locate many • Zurich staff. With the US mutual fund range acquired from Our presence across Group functions including Continental Europe is Nationwide, we now have legal, group information growing significantly, a strong platform on which and human resources; further enhanced by the to service institutional and london is the investment recent acquisition of certain wholesale channels. centre for UK & European businesses from Credit Sao Paulo and Toronto equity and fixed income Suisse. Amsterdam is a key offices were opened in teams, our largest office by marketing office for the October and November number of staff, and where Dutch pensions market and respectively. we locate most UK client also European property servicing and business clients. The Nordic region is relationship staff. the base of operations for Edinburgh is the investment much of our global property centre for global equity, capability. luxembourg multi-asset and structured is the domicile for the product teams, as well as Aberdeen Global fund the company secretarial range. Continental Europe teams for the UK now accounts for 37% of investment trust range. group AuM. KEY ASSETS BY ClIENT TYPE Open ended funds • Main investment centres €32.0bn Pension funds €44.8bn • Sales and distribution offices only Other Insurance • Key property centres only €18.2bn institutional €12.3bn Closed end Central funds banks, €9.6bn government Third agencies party distribution €15.3bn €27.8bn Source: Aberdeen Asset Managers Limited Figures as at 30 September 2009 Total €160.0bn As at 30 September 2009
  6. 6. MIDDlE EAST AND AFRICA ASIA PACIFIC AUSTRAlIA The Middle East and Africa • Bangkok • Sydney are important sources of • hong Kong With 75 employees and institutional funds, and we • Kuala lumpur e11.1 billion invested by have strong client bases • Shanghai Australian clients in our which we service from • Singapore london. We currently • Taipei products, the Group’s manage over e12.3 billion • Tokyo Australian operation has a sizeable presence in this of assets for institutional The Asian headquarters of relatively sophisticated and sovereign wealth the Group is in Singapore, retirement savings market. entities in those regions. and is home to most of Our funds in Australia our Asian fund managers offer local investors a covering the main asset comprehensive choice of classes, as well as to domestic, regional, global substantial marketing, and emerging market client servicing and investments. Additionally, administrative functions: we manage a range of over 155 staff in all. Other specialist mandates in fixed full service offices are in income and equities and an hong Kong, Kuala lumpur investment company that and Bangkok, plus we have is listed on the Australian research and client servicing Stock Exchange. in North Asia. Asian clients account for e7.6 billion of AuM and our investment in Asian securities, both equities and fixed income, is a core competence for the group. Global reach, local understanding We know global markets from the local level upwards, drawing on over 1,850 staff, across 28 offices in 23 countries. We believe our focus, size and approach enable us to provide effective asset management and superior client service. Our teams champion original thinking and knowledge, so investment decisions are based only on our own research. As a group, we have the scale to provide global coverage of financial markets; yet we are small enough to focus on each and every portfolio decision. Close-knit teams, clear investment processes and flat structures are important to us. We seek to grow our clients’ assets in a way that is manageable and sustainable over the longer term. The information on the Aberdeen Asset Management Group contained in this document is of a general nature on the activities carried out by certain group entities. This information is therefore only indicative and does not constitute any form of contractual agreement, nor is it to be considered as an offer or solicitation to deal in any financial instruments or engage in any investment service or activity. The value of investments can fall as well as rise and investors may get back less than the amount invested. Issued and approved by Aberdeen Asset Managers limited which is authorised and regulated by the Financial Services Authority in the United Kingdom. Member of the Aberdeen Asset Management PlC group of companies. Registered Office: 10 Queens Terrace, Aberdeen AB10 1YG. Registered in Scotland No. 108419 01 5008_1209