Aberdeen Asset Management focused on growing its US offshore business
Bev Hendry, current co-Head of Aberdeen Asset Management in the Americas, came to Fort Lauderdale 19 years ago to plant the seed of the Scottish asset management firm in the Americas. “In 1995, it was decided that America would be the next area of growth for Aberdeen Asset Management, at a time when the company was present only in its home town, Aberdeen, and in London and Singapore,” Hendry said during an interview with Funds Society.
The strategy proved successful as the region of the Americas “has grown so much that we thought it made sense to give it two co-Heads,” Bev Hendry deals with the financial side, as well as the US offshore business, Latin America, and Canada, while Andrew Smith is more focused on the operational side of the business as well as the US domestic leg. Both have come to replace Gary Marshall, who last summer returned to Scotland to participate in the integration of the recently acquired business of Scottish Widows. Both Bev Hendry and Andrew Smith have their offices in Philadelphia, the American city that serves as Aberdeen’s headquarters in the United States.
“Andrew and I have known each other since 2000, when he was working in our offices in Fort Lauderdale,” Hendry said. “The first thing we developed was the offshore business in the US, even before the institutional one in Chile, which was followed by those of Peru and Colombia,” he added. Now, Linda Cartusciello, who is based in Miami, is in charge of all the institutional business in Latin America. Also in Miami is Maria Eugenia Cordova, who deals purely with the US offshore business that has its epicenter in this city. Maria Eugenia reports to Mennode Vreeze, Head of Business Development of the US offshore business, whose team is completed by Damian Zamudio and AndreaAjila; all three are based in New York.
In New York, Aberdeen also has fixed-income and alternative investment teams. As confirmed by Hendry, one of Aberdeen’s main goals in the Americas region, is to boost the offshore business in the United States. “Each month, the offshore team meets in Miami. This coming year we want to participate in more events and conferences for this market segment and provide our customers, particularly broker dealers, the support and the specific products they demand.” With this, Hendry refers to specific share classes for the funds demanded by offshore investors in the US, which often differ to those, which are registered in European platforms.
Aberdeen is commonly recognized as one of the strongest asset management companies for emerging markets global equity, although Hendry emphasizes that they also offer interesting management capabilities in other asset classes such as fixed income, real estate, and alternative investments. “We are a much more diversified asset management company than we were 10 years ago, but we have to convey this message to investors, as US offshore investors have known us for almost 20 years as an asset management company specializing in emerging markets’ equity.”
Emerging market debt would be one of the asset classes to emphasize. “The process is very similar to our equities business. We follow a very fundamental bottom-up process, with careful attention in selecting corporate credit securities.” These strategies, notes Hendry, “offer higher yield while diversifying a fixed income portfolio.” In emerging market debt Aberdeen has, amongst others, a Global Select Emerging Markets Bond strategy and a Frontier Markets Bond strategy, launched a year ago, “even though Aberdeen has been investing for a long time in frontier markets’ fixed income through our Flexible Bond strategy”, Hendry stressed.
In the Latin American market, Aberdeen Asset Management is also widely recognized for its emerging market equities franchise. It is, in fact, the asset management company with the most assets in emerging market equities in Chile and Peru, and the second in Colombia. “These are the regions in which we have focused the most and for which we are best known.”
Now they are also focusing on Brazil, where the firm has a business development team of two people in Sao Paulo, because “the market is beginning to open up through their pension funds business.” Aberdeen opened the office in Sao Paulo in 2009 as an investment center and “we now have two local funds that invest in Brazilian equity and fixed income.” Hendry points out that they are finally seeing a clear appetite by Brazilian pension funds for diversifying internationally. The creation of a feeder fund that invests in one of its flagship funds, or the creation of custom institutional vehicles, are amongst Aberdeen’s plans for Brazil.
Mexico is another market that Aberdeen is following closely. “It is quite possible that in the future Mexico will be an important Latin American business focus for Aberdeen, and that eventually it might consider opening an office there,” said Hendry. Should that be the case, it would add to the five Aberdeen offices already in the region in Philadelphia, New York, Miami, Toronto, and Sao Paulo. Overall, Aberdeen Asset Management has AUMs of US$80bn in the Americas, of which US$7bn are Latin American and US offshore assets. According to information available at the end of July 2014, the Latin American institutional business comprises US$5.4bn, while the remaining US$1.6bn relate to assets of US offshore business. Hendry concludes by noting that “we have a great and very enthusiastic team, who devotes all its efforts and expertise to develop Aberdeen’s business in the Americas.”