InvestmentEurope's recent Lausanne Summit saw ten management groups outline their unique investment ideas, including Aberdeen Asset Management.
InvestmentEurope’s recent Lausanne Summit saw ten management groups outline their unique investment ideas, including Aberdeen Asset Management.
The golden investment rules
The fundamentals of investing remain the same whatever the asset class or geography, according to Aberdeen Asset Managers presenting at InvestmentEurope‘s pan-European summit in Lausanne.
Senior investment manager Ben Ritchie said the 16-strong team at Aberdeen focused relentlessly on quality, value and price, running high conviction portfolios across its range of equity funds. He said the firm is now targeting Europe.
“We want to build a franchise here that is as successful as our franchise in other parts of the world.”
Among the ‘golden rules’ now promoted by the firm are:
• The treatment of minority shareholders says a lot about the quality of management in any company, and how a firm has treated stakeholders in the past is a reliable indication of how they will do so in future.
• The asset management business is not just about assets; it is about people as well. People have to be both incentivised and when necessary, constrained.
• Investors should be extremely wary of the over-ambitious company, or chief executive who pursues ‘trophy strategies’ such as highprofile M&A, excessive leverage and who disregards value.
• A firm’s balance sheet strength is critical, not only for the good times, to be able to take advantage of any opportunities, but also in the bad times, to see it through the investment cycle.
• Investors must understand what they are buying. Ritchie pointed to the “attraction of complexity” to some, who equate that with sophistication and success.
• Rely mainly on your own research – don’t outsource and then complain when the outcome was not as expected.
• Think long term. “Get the inputs right. Performance is an output of process.”
• Benchmarks are measuring devices, not portfolio construction tools. “The benchmark is not the start point of an investment process; it is the end point.”
• Take advantage of irrational behaviour in the market.
For full details on InvestmentEurope‘s Fund Selector Summit click here: