Yoon-chou chong has integrated aberdeen's uk and europe equities into a finely tuned team
Aberdeen Asset Management has moved to a pan-European investment focus, following Yoon-Chou Chong taking over as head of European equities.
The strategic move had been touted early last year and subsequently then heads of Aberdeen UK and European equities, Simon Atherton and Adrian Fowler, respectively, left the group.
Chou took on the role of head of UK equities late last year and restructured the investment process along the lines of Hugh Young at Aberdeen Asia. Chou has now completed the integration of the UK and European desks into a single team.
He said far less work was required to bring the European desk into line than the remodelling of the UK desk and the amalgamation of the two will bring a consistency of process to Aberdeen's equity funds.
'After stabilising the UK operation we wanted to go back to the original plan of 12-18 months ago of having a true pan-European team. The European desk was halfway there anyway and it was more a case of fine tuning the procedures to achieve a single unifying process,' Chou said.
Since Chou's repositioning of the Aberdeen UK Growth and UK Blue Chip funds, both have delivered top quartile performance. UK Blue Chip is up 9.6% and UK Growth 9.1% versus a 6.3% sector average over three months to 28 April, bid to bid, ranking them 16 and 21 out of 312 peers, respectively.
Chou has reduced the European team's emphasis on top down macro inputs, sector allocation and beta management, shifting the focus onto bottom up stock selection. This has been supported by the implementation of a more regimented discipline regarding company visits. Managers will now be required to visit companies before investing in them and meet companies held in portfolios twice a year. These meetings will be carried out by different team members to provide alternative viewpoints on stocks and to encourage a team approach.
Analysts will also now conduct cross-sector coverage of stocks to broaden their knowledge base and facilitate more educated team discussions on stock ideas.
The Aberdeen European Champions fund, managed by Stephanie Gerrard and Chou, is being positioned as the group's flagship European equity vehicle. The fund is a concentrated portfolio of the team's best stock picks and as such is already run in Chou's preferred style.
The group's £290m European Growth fund will take its lead from European Champions but will be run more in an institutional style and as a core holding.
Chou said European Growth will have a strong overlap with European Champions but will run with less aggressive stock weightings and more benchmark stocks to reduce its tracking error.
Chou is also in the latter stages of revamping the UK Mid Cap fund hw runs, having trimmed the portfolio from 67 to 45 stocks and reduced a number of stock bets to 1%-2% positions.
'We are still looking for a couple more stock ideas but we know what we want it is just a matter of timing. We have about four FTSE 100 stocks in their place in the meantime due to the liquidity considerations of investing in the FTSE Mid-250,' Chou noted.
Meanwhile, analysts Simon Kirton and Gregor Smith have now left Aberdeen and their positions filled by participants in the group's graduate trainee scheme.
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