KUALA LUMPUR: Aberdeen Asset Management Plc plans to increase its investments in Malaysia soon.
It currently has some US$5.2bil’s (RM16.7bil) worth of assets invested in the country.
However, the biggest obstacle it faced was finding good quality companies, due to its conservative approach in selecting investments, said chief executive and founder Martin Gilbert.
“We just try to find the right and good quality companies to invest in gradually. It is the biggest obstacle to putting more money into Malaysia, because we have capacity issues.
“We are turning away money to invest in emerging markets in Asia because we can’t find the right quality of companies to invest in,” he told StarBiz. The company’s investment is not limited to Malaysia but other emerging markets as well.
While they are hard to find, Gilbert said Aberdeen was always in the market for quality companies.
According to him, the company liked strong balance sheets, good cashflows and conservatively managed companies. He added that the selected companies would also have to be reasonably sized.
“We need to be able to put US$1bil in,” he said.
Gilbert added that the process of selecting the companies to invest in could take a couple of years.
“We would ask if the management of the company would look after its minority shareholders. We would also meet up with them several times before buying the stock,” he said.
Aberdeen adopts a buy-and-hold strategy in its investment decisions.
“Life is much easier if you don’t trade. And if you own 10% to 15% of a stock, you just have to go through with the cycles. Over the long term, we have got great performance. We are really the safe fund management group,” said Gilbert.
He added that he was bullish on emerging markets, especially Malaysia.
“Malaysia is one of them (emerging markets), and it has all the attributes we like: a growing population, good energy, resources and good land,” he said.
Because Aberdeen takes a more bottom-up approach in its investment decisions, Gilbert said he was not so concerned about the Fitch Ratings‘ downgrade of Malaysia’s sovereign credit outlook to “negative” from “stable” on June 30.
“Investors like ourselves do our own research on countries, so we would make our own assessment rather than rely wholly on external research. I think Malaysia is in a good position right now,” he said.
While the rate of growth and the state of the economy is not so much a concern, Aberdeen does study the effects this has on individual companies.
Aberdeen is the first foreign fund manager to have been awarded a domestic asset management licence in Malaysia. It has some US$315bil in assets under management, of which US$112bil is in Asia.
Some of the positions it currently holds are in Public Bank Bhd, CIMB Bank Bhd, LPI Capital Bhd, Manulife Holdings Bhd and Allianz Malaysia Bhd.
Source: The Star Publication
Published: Tuesday October 1, 2013
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