What interests me is that in your interview I put my team, the Aberdeen, was the last one that defeated Real Madrid in a European final. " That ephemeris happened in the distant year of 1983 just when Martin Gilbert (Malaysia, 1955) founded with other partners Aberdeen Asset Management. Under her leadership, the Scottish fund manager was growing thanks to an aggressive acquisitions policy. The final hit came in the summer of 2017 when he announced the merger with Standard Life. Fruit of that union was born a financial giant with assets under management valued at 610,000 million pounds (about 690,000 million euros).
Question. Investors start to get nervous. At what market moment are we?
Answer. We entered a more complicated market. The situation tends to be normal after a long period characterized by liquidity injections by central banks. From the point of view of investment, we will return to basics, to a strategy based on fundamental aspects. During the last four or five years conditions have favored managers who apply passive strategies [replican índices]; This new phase I think will be more favorable to active managers like us.
"The biggest challenge for an investor right now is finding profitability"
P. Right now, what are the biggest challenges that an investor must face?
R. The biggest challenge is finding profitability. The valuation of equities is at high levels and the bond market is very difficult. If rates remain low, it will be difficult to achieve profitability in fixed income, and if inflation rises, investors will suffer capital losses.
P. In an average portfolio, would you recommend overweight stocks or bonds?
R. Actions. The key to equity is to find real value, especially in companies with a good, sustainable, growing dividend. Companies in value sectors [valor] they are better valued than growth ones, especially technological ones.
P. Talk about the normalization of markets. Is it possible that central banks can withdraw such a large amount of liquidity without causing any harm?
R. No, it is not possible. Nobody has done an experiment of this caliber before and they will have to withdraw the liquidity very gradually.
P. Do you like the Spanish market?
"Large managers are not a systemic risk. Another debate is whether some funds are "
R. From the business point of view, it is a big market because it is, together with Italy, one of the few that grows in assets under management. If we speak as investors, in the Spanish Stock Exchange there are still values that have real value. For example, Santander grows robustly, has a presence in Latin America and its price is at the same level as two years ago.
P. Are they activist investors?
R. We are halfway there. We are not activists, but neither do we sit idly by. We talk to the managers of the companies, with the president. In addition, we are very present when investing the ESG [medio ambiente, gobierno corporativo e impacto social].
P. He has stated on several occasions that he wants to exceed one trillion euros in assets under management. How do you plan to achieve it?
R. We are the largest independent firm outside the US, but we are still far from the giants with three trillion in assets. We need to be bigger and I think we will reach the goal with organic growth and through specific acquisitions. We have the most healthy balance in the sector and that gives us room to grow.
P. Why is size so important in this industry?
R. Commissions have been reduced, partly due to the growth of passive funds. In addition, there are higher costs for regulatory developments such as Mifid II.
P. Some regulators warn that the creation of such large firms increases systemic risk. What do you think?
"Size in this sector is important: commissions are lower and there are more expenses"
R. There is no systemic risk because the assets held by the fund managers, unlike what happened 10 years ago with banks and insurers, are not on their balance sheet. Another question is whether some of the funds managed by the industry, by their size, are systemic in themselves. If a fund has hundreds of billions invested in emerging debt or junk bonds and risk aversion changes there may be liquidity problems if they decide to rescue their money all at once.
P. Do you think that in the future only robots will manage our money?
R. I do not think so. They will help the managers to make decisions with their capacity for data management. For small investors, with assets of 50,000 euros, it would make sense to use roboadvisors, but all the research that has been done shows that, at some point in the transaction, the client always wants to have a person to talk to on the other side. Probably, what happens is that the advisor will have to have different skills in the future.
P. When Aberdeen and Standard Life merged they opted for a two-headed model in the dome. Now, some investors ask to return to the model of a single CEO. What do you think?
R. I do not think that will happen in the next two years. There is still much to be done to complete the merger and, when that happens, it seems logical that we go to a more traditional structure. But at the moment, both Keith [Skeoch] as I am complementing ourselves well. In any case, it is not a decision that depends on me, but on the advice.
P. As a Scotsman, what do you think about Brexit?
R. It does not matter much what I think. People voted and Brexit came out. From the point of view of the business, it does not affect us much because in Europe we never sell funds domiciled in the United Kingdom but in Luxembourg. Whatever happens, we are prepared, we have contingency plans.