abrdn | making a long-term commitment to the US market

abrdn, the result of a merger in 2017 between Aberdeen Asset Management and Standard Life, is headquartered in Edinburgh, the UK’s largest financial centre after London.

We spoke to Tam McVie, Senior Director, Alternatives, and Eric Roberts, Head of Business Development, Institutional, about the group's long-term expansion plans and the challenges of growing in the highly competitive US asset management market.

What does your company do?

abrdn is the result of a merger between Aberdeen Asset Management and Standard Life. It has assets under management globally of over $600bn. In the US we manage more than $60 billion on behalf of Americas clients and global clients invested in the region across strategies.”

How long have you been operating out of the US?

Prior to the merger, Aberdeen and Standard Life Investments already had respective US businesses. Both firms had very sizeable US presences and had been in the US for almost 20 years at the time of the merger.

The merger brought lots of capability on both sides. We now have full distribution channels for retail and institutional clients. Along with the public market investments that we have, we now have a full suite of private market alternatives as well.

There are definitely opportunities in the US for international and UK-based asset managers.  There is an attraction for US investors to work with UK based asset managers because they are getting something a little bit different

What have been some of the key challenges of growing your operations in the US?

The US is attractive to managers from around the globe. It is an extremely large market with lots of opportunities. But it is a very trying market. You have got to make a long-term multi-year commitment to it. You have got to have all the supporting functional areas to properly execute it. It does not happen instantaneously in a year.

As much as the opportunities are attractive, the challenges are massive as the competition is so high. As UK asset managers there is no exporting of UK vehicles into the US. You need to have a full suite of US specific vehicles with all the legals and service support behind it. If you want to distribute in the US you have to have an institutional sales team and a wealth sales team on the ground.

There is … an appreciation from US allocators that, as a Scottish fund manager, we do have that strong risk heritage and a mindset that, whilst looking for strong investment returns, we operate strong risk management controls.

Are there any advantages to being a Scottish company when operating in the US?

There are definitely opportunities in the US for international and UK-based asset managers.  While there are lots of barriers to entry for international fund managers, there is an attraction for US investors to work with UK based asset managers because they are getting something a little bit different.

We bring different geopolitical and macro views of the market that are not always viewed from a US perspective. And being an asset manager in emerging markets we can bring a different macro view on markets which is also appreciated. The fact that we look at things from a slightly different vantage point is a common positive feedback that we get from clients.

There is certainly also an appreciation from US allocators that, as a Scottish fund manager,  we do have that strong risk heritage and a mindset that, whilst looking for strong investment returns, we operate strong risk management controls.

Tell us about your company's growth ambitions in the US.

We are going to continue to be a leader in emerging markets for equity and fixed income. That is a major focus of our business.

We will also continue to grow our successful hedge fund platform. Our fund investing in hedge fund indices in partnership with HFR [a leading provider of hedge fund data] is a game changer. We just launched that in July. It is really innovative to the market and has a lot of scale to it. The pipeline for that is growing significantly in terms of blue chip allocators interested in investing in it.

The private credit side will also be a major growth driver as we are one of the only small number of asset managers offering that in the marketplace.