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Nov 22, 2010

Fund manager profile: Peter Taylor, Aberdeen Asia

Asia’s profile as an investment center is growing, but the quality of disclosure varies across the region

Peter Taylor, investment manager and head of corporate governance at Aberdeen Asset Management Asia, joined the investment firm in 2007 after several years working for the International Finance Corporation in Washington and Hong Kong. Despite his British upbringing, he has never worked in the UK.

How is Asia’s profile as an investment center changing?
Singapore and Hong Kong are already very effective centers for investing across Asia, with many Asian companies coming through on non-deal roadshows and IR tours, but they are not yet real centers for companies from outside the region. I think we’re starting to see the beginning of a trend of multinational companies from Europe and elsewhere coming to Singapore, but it’s still a small thing.

Asia is now seen as a destination for investment capital, but over time I think it will increasingly be seen as a source of capital for companies across the globe. Inevitably, that will lead to more attention being paid to Asian investors by IR teams.

What is your investment style?
We take a bottom-up approach; we want to know the companies as much as possible. For that kind of process, we like having offices in Asia. These are not only in Singapore; we have offices across the region. Key for us is corporate access: we only invest if we can meet with companies, by which we mean a one-on-one meeting.

To what extent can IR stand in for the C-suite?
Within corporate access, the IR team is valuable but there is no substitute for meeting senior management. You don’t have to meet the CFO every time you see a company, but that contact is very valuable to us. There have been definite cases where we have been unsure about a company – we’ve liked it, but have had question marks – and a meeting with the CEO has given us assurance.

How useful do you find investor conferences?
They are the most obvious way to provide corporate access to the investment community. I think we are quite spoilt in Singapore, and to an even greater extent in Hong Kong. This is particularly true of larger companies. When you’re talking about mid-caps and large caps, there is pretty good access in Singapore and Hong Kong.

Investment conferences are not the only way we meet companies; we’re even happier to have them come and meet us in our offices. But we are fortunate that we are a sizable investor in the region – the level of service we have from brokers and companies means our primary route for meeting companies is through conferences.

Are you prepared to travel?
Yes. Once you move down to the small-cap space you have to get on your feet, go to the airport and travel to the countries involved.

What is access to information like in Asia?
One of the challenges we have, and something that varies a lot between companies and countries, is the quality of disclosure, especially the quality of disclosure on websites. I think a big part of IR is presenting the information well, having websites or other sources of information that are updated regularly and items like analyst presentations and management commentary on results, not just the raw numbers.

How does the quality of disclosure vary?
Across markets I think it’s fair to say it’s stronger among Hong Kong and Singaporean companies, less strong in Korea, Taiwan, Indonesia, the Philippines, India and the emerging Asian markets. We want more timely and clearer disclosure around interim and annual statements, as well as the timely issuance of annual reports that are easy to access on the website.

What is access to board members like?
One area of investor relations I’d like to see more of here is access to non-executive directors and the chairman of the company, which I believe is quite common in the UK but is very rare in this part of the world. There are plenty of companies here that have an independent, non-executive chairman – in the UK, they would see it as an important part of their job to go around and meet investors. Unfortunately, that hasn’t caught on here yet.

Fund Snapshot

Fund name Aberdeen Global – Asia-Pacific Equity
Objective Long-term total return by investing in Asia-Pacific equities excluding Japan
Fund size $7.1 bn
Date of launch April 26, 1988
Number of holdings 55
Top five holdings Rio Tinto, Oversea-Chinese Banking Corp, Jardine Strategic Holdings, Aberdeen Global - Indian Equity Fund, QBE Insurance

Details correct as at September 30, 2010
Source: Aberdeen Asset Management Asia