Hugh Young “fell into the City”. He claims never to have had the concentration needed to be a specialist and left university — Exeter, where he studied politics — with no idea of what he wanted to do. His brief attention span has served him well, however: the Briton is managing director of a firm with assets of S$102.5bn ($75.5bn) under management in Asia.
“I failed to get into lots of things — international banking, the Foreign Office,” says Mr Young in an interview at the Singapore offices of Aberdeen Asset Management. “I fell into the City through a personal introduction from the grandmother of a girlfriend.”
Mr Young, 58, was hired by a stockbroker and earned half the salary of friends who went into accountancy. He joined Aberdeen in 1985, moving to Singapore in 1992 to set up Aberdeen’s Asian operation, building it from a business of S$500m assets under management.
He is regarded as a key figure at Europe’s third-largest listed fund manager. Yet Mr Young is doubtful that a similar accidental introduction to the City would be possible now.
The focus of Aberdeen’s recruitment these days is “trying to detect a bit of passion in people”, he says, which means sifting out applicants who are overly driven by money.
“If you really want to make a lot of money go to Goldman Sachs,” says Mr Young. “We want people to have lives, to try to work as a team.”
Instead, his emphasis is on the company finding recruits with an interest in politics and economics, accompanied by emotional intelligence. Politics, he argues, has served him well, as the subject encourages a wide view of global trends.
“We try and be broad. One assumes people are bright and can learn. Apart from a very few jobs, the maths that one uses is not terribly complex — it’s more looking for a spark in people.”
Aberdeen’s Singapore offices are a cluster of converted “shop houses”, a common architectural style in Southeast Asia; the ground floor is a narrow-fronted shop opening on to the pavement, while the owner lives upstairs. The corridors are filled with Asian artefacts including — in the conference room where we meet — a metal image of Chairman Mao, which once adorned a Chinese locomotive.
Looking for a spark in a job applicant can be harder in Asia, Mr Young suggests. He believes people there can be more reticent.
The emphasis on teamwork means there is space for a mix of personalities. “We’re a slightly different company from most,” he says. “We espouse the team approach; the quieter ones that are less outward going, and the ones that you push out in the public space. A mix of extroverts and introverts.”
Emotional intelligence, Mr Young explains, is useful when assessing a company’s culture, an important aspect of Aberdeen’s approach to investment.
“There are so many cases where you know the numbers can lie,” he says. “So it is trying to understand, trying to analyse the culture of a company — whether it’s an environment for good things to happen or bad things to happen.”
He cites OCBC, Singapore’s second-biggest bank by assets, as an example of a company with a “wonderfully conservative” culture, maintained by a founding family who are still substantial shareholders.
Such a culture combined with an adventurous management is a perfect blend, he suggests. “You need a bit of action, a bit of renewal. The one before last was very good,” he adds, referring to David Conner, OCBC’s former chief executive. “He got the family to retain core values and still do things.”
Other investments have been less sunny. Aberdeen Asset Management Asia is the second-biggest shareholder in Standard Chartered, the UK-listed bank troubled by bad loans in Asia. Aberdeen has suffered from persistent outflows over 13 consecutive quarters, blaming this on a worsening of investor sentiment towards emerging markets. In July, St James’s Place, a longstanding client, pulled £1.3bn from Aberdeen and said it would remove Mr Young as manager of the SJP Far East fund from the fourth quarter. These are challenging times for the company.
“You do look back,” says Mr Young of StanChart. “There, you kick yourself for not doing something.
“When the crisis hit initially it was clean. We thought western banks were going to be screwed. There was the odd strange loan from Indonesia, from India. The thing with loans is that you find out they’re bad three years after they are made.”
The traditional asset management industry has come under pressure from a shift to cheaper passive strategies, such as exchange traded funds, which mimic how a market or index performs.
“The rise of the ETF has been a big drain,” Mr Young concedes. “People are a lot more aware of cost. The economics of the overall [asset management] industry is a lot less attractive than it was. People are being made to work harder for their money. Clients expect more.”
He welcomes being challenged by clients, adding that the focus of a fund manager’s work is often “making people understand … The only thing we can guarantee is a period when we underperform,” he notes.
Nearly a quarter of a century has passed since Mr Young arrived in Singapore alone, joined a month later by a colleague from the UK. “I was dealing, marketing, probably compliance as well rolled into one,” he says. He worked through weekends and rarely took a break. Now, there is time for a companionable lunch.
In person, Mr Young combines self-deprecating charm with polished manners. The next generation of leadership is represented by Flavia Cheong, a Singaporean who is Aberdeen’s head of equities for Asia Pacific outside Japan. She takes on management duties including appraisals.
“If I do fall under a bus,” Mr Young says, “I like to think people will miss me. The reality is that the business will go on smoothly.”