Aberdeen Plc, which manages $298.3 billion in assets (as of July 30), was recently in the news for the management takeover of the $1.2-billion Blackstone India Fund — making it one of the biggest India-focused funds. Hugh Young, managing director, Aberdeen Asset Management Asia, tells Joydeep Ghosh the focus of the fund will not have a pre-determined large-cap bias. Instead, it will have a good bottom-up stock selection. Edited excerpts:
What prompted Aberdeen to take over Blackstone’s India fund?
We have expertise in emerging market equities and in closed-end funds. We manage more emerging market closed-end funds by value and number than anyone else, including, nine listed on the NYSE and 18 in the UK/British Isles. Of these, many are either emerging market or have exposure to ‘high-growth’ markets. Hence, the opportunity to manage this fund was a natural fit for us.
Given that India Fund is a large-cap fund, do you plan to change the scheme’s investment strategy?
We will follow an active approach based on good bottom-up stock selection, supported by first-hand company research. We don’t have a pre-determined market-cap bias.
What other funds are you managing in India?
We have been investing in Indian equities since the early 1990s and started our first dedicated fund in 1996. Aberdeen manages $74 billion in Asia Pacific (excluding Japan) equity securities. Our main vehicle, the Luxembourg-listed Aberdeen Global - Indian Equities fund, is $4 billion in size and top quartile over the past five years. The fund has returned 17.6 per cent since launch and 5.86 per cent in the last one year, whereas the benchmark (MSCI) has returned -6.84 per cent.
Is there a deal value that you can share with us?
The deal needs to be ratified by shareholders. The shareholders will be asked to consider the new management agreement at a special meeting on November 16. Aberdeen Asia is expected to become the Fund’s investment manager shortly after stockholder approval of the new management agreement.
