Aberdeen style reshuffle
group to align management philosophy of its underperforming uk funds with its european desk
Aberdeen is seeking to shed its pure growth tag in the UK with a greater emphasis on appropriate style management in the underperforming UK funds taken over by Simon Atherton and Neil Cumming.
The change to the group's UK philosophy, bringing it into line with its pragmatic European equity approach, has been cemented by Adrian Fowler's promotion to head of pan-European equities.
The shift, driven by Aberdeen chief investment officer Katherine Garrett-Cox, has been accompanied by a move to formalise communications between UK analysts and their European counterparts.
Atherton, who has been placed at the head of Aberdeen's UK desk, reporting to Fowler, said the rationalisation of the UK and European desks will see the UK funds adopting the same flexibility of approach that has been a feature of Aberdeen's European funds of late. Both he and Fowler admitted that adherence to a growth bias had made it difficult for the UK mandates to prosper during the past two difficult years.
Despite the shift, Aberdeen's UK and European funds have taken a growth stance, which the group sees as appropriate to current market conditions.
Atherton said: 'One of the key parts of the European process is the greater flexibility in terms of adapting to market environments. We want to take advantage of the market environment and in the past we have been too rigid on the UK side.
'The UK process will become similar to that of the European team and we will be prepared to rotate our style orientation to suit the market, rather than stay with an entrenched growth view.'
Atherton, manager of the A-rated Aberdeen UK Mid Cap fund, has just taken over the management of Aberdeen UK Blue Chip, following the departure of Jon Thornton to Gartmore. The UK Blue Chip has delivered fourth-quartile performance over one, three and five years, on a bid-to-bid basis.
Over the three years to 18 January, the fund fell 12.88%, bid-to-bid, compared to a sector average rise of 5.63%.
While a few stocks will be altered, there will be no wholesale changes to the fund, which will retain its 60-stock aggressive mandate.
Atherton said: 'The Blue Chip fund has had a pro-growth bias for some time and was arguably not flexible enough. We believe the growth style is now valid and that is reflected across our portfolios. There are just one or two stock-specific issues still to address.'
Aberdeen UK Growth, now managed by Cumming, will undergo minor changes to its holdings, while maintaining its more risk averse, 110-stock, diversified approach.
Gary Marshall, sales and marketing director at Aberdeen Asset Management, added: 'Clearly, there are going to be some changes at the stock level but we are not talking about wholesale changes. It is more about the ability of the fund to adapt moving forward.'
Aberdeen hopes its move to a pan-European basis will facilitate a more structured approach across the European and UK teams.
Fowler noted: 'It is a natural evolution given the convergence between the UK and the rest of Europe. It is sensible to look at research on a pan-European basis but we will still have the ability to differentiate portfolios in terms of style tilts and sector weightings.'
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