Aberdeen’s Young dismisses retirement talk

Aberdeen’s Young dismisses retirement talk

Aberdeen’s Hugh Young has dismissed retirement suggestions and says he has begun to “knit together” the asset manager’s investment teams in an effort to remove overlap.

The managing director of Aberdeen Asset Management Asia has told Investment Adviser he is now “overlooking all of [the investment business] and trying to knit it together”, having shifted roles in the company last summer.

“The danger is becoming siloed. It’s a function of acquisitions, [but] we don’t need four or five different teams thinking about the impact of rates going up. My role is a very practical thing, it is getting people to share information,” he said.

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The MD, the asset manager’s most senior investment professional, handed over his global head of equities role to Devan Kaloo last July.

A further shake-up to Aberdeen’s investment team came this spring with the departure of chief investment officer Anne Richards for M&G.

But despite having now spent more than three decades at the company himself, and stating Mr Kaloo had “more energy”, Mr Young said he did not yet even have a date in mind for retirement.

“We try to be good at succession has been a pretty seamless transition. I still enjoy the job, I’ve been enjoying it as much as ever,” he said.

The manager continues to sit on the Asian equities desk, which runs the fund house’s flagship portfolios, and remains particularly involved in “top-level” issues such as corporate engagement.

The fund house has had plenty of engaging to do with firms such as Standard Chartered. Aberdeen is the second-largest shareholder in the company and supported last year’s rights issue, but Mr Young accepted a turnaround would be a “slow haul”.

The bank’s 2015 share price slump contributed to another year of underperformance for Aberdeen’s Asia Pacific equity funds, compounding the problem of an investor flight from emerging markets in a year that saw the fund house suffer over £35bn in net outflows.

In 2016, however, the asset manager’s Asia Pacific Equity fund, now £1.1bn in size, has outperformed its peer group amid slight gains for Asia Pacific indices.

FE Analytics figures suggest the portfolio’s relative performance has lately fared better in rising rather than falling markets, but Mr Young said recent issues were simply a factor of asset allocation rather than market beta.

“We [still] typically do better in tough times and worse in strong times. At a broad level, [underperformance] has been a result of asset allocation. We are light in North Asia, heavy in South-East Asia, combined with the fact that ‘value’ characteristics have had a tough period.”

Emerging market stock performance remains “bifurcated” despite the recent rally, he noted.

“You have got some very cheap sectors, like banks and property companies, but they are cheap for a reason.”

Mr Young said he remained cautious of such areas, not least because attractive valuations are offset by relatively flat earnings growth.