An insight into Standard Life Aberdeen’s young Abu Dhabi office
By Mark Battersby, 7 Mar 18
One of the youngest international offices in the merged Standard Life Aberdeen Group was set up by Aberdeen Asset Management in late 2016, before two businesses combined.
As far as investment performance is concerned, there have been a few question marks around the performance of the funds and the outflows. What is your message to people on the performance of Aberdeen Funds going forward?
The way that we manage money on the active equity side is very much benchmark agnostic to build a high-quality portfolio. That does mean that for periods, it is disappointing for us as for clients, but it can differentiate and deviate from the benchmark. It can have periods when it underperforms, and the key thing for us when we look at it, is we’ are following the same process.
Is it underperforming for reasons we can understand, or is it something completely different? It’s going to stop underperforming for areas that we can understand. So, if I take our emerging and global equity funds one of the reasons we’ve underperformed is that we don’t have exposure to Chinese technology companies. That’s an area that we’re a little bit concerned as to valuations there.
So, we have not had a great exposure there, and those have been areas that have had a great couple of years, but we expect that China is going to grow quite well over the next couple of years, but probably not to the same level that it has in previous years.
The slow-down down in China may take some of the wind out of the sails of those Chinese tech companies, in which case the area that has hurt us in previous years may be more neutral, if not positive, going forward.
Also, one area that we have focused on for many years is domestic demand. It has been a key theme that we’ have come across, not from the top down, but just as a by-product of the companies that we invest in. Domestic demand points to investing in places like Brazil and India, markets which have got very strong, thriving, middle-market, middle-income parts of the markets, that aren’t particularly correlated and don’t do much exploiting.
Those are two markets that we are very positive on, and if you see the return they can potentially generate on a three to five-year horizon, we are confident.
