e-fundresearch.com: When did you take over the responsibility of managing the Aberdeen AM UK and European Equities (ISIN: LU0094541447)?
Jeremy Whitley: July 2009
e-fundresearch.com: What is the current size of the fund?
Jeremy Whitley: Euro 240mn
e-fundresearch.com: What is the total amount of assets you manage currently?
Jeremy Whitley: As at 31 December 2012 the Pan European equity team managed 34 accounts assets totaling over? Euro 5.9 billion in European and UK equity portfolios.
e-fundresearch.com: How long have you been in the business as a fund manager?
Jeremy Whitley: I joined the industry in 1988.
e-fundresearch.com: What are the main steps in your investment process and in which area is your competitive edge to add value to investors?
Jeremy Whitley: Our competitive advantage derives mainly from the consistency of our approach, and the disciplines that we adhere to, irrespective of market conditions. We are active stockpickers and therefore good stock selection is the main driver of alpha, along with tactical top-slicing/adding on weakness within a basic buy-and-hold strategy.
We always visit a company before investing. If we don't like a stock, we won't invest in it - irrespective of index weight. We try to differentiate ourselves by exploiting the advantages we have at the margin: i.e. better research, more cross-coverage, a culture that prefers teams to individuals (we don't believe in 'star managers'), and the experience among our senior members of working for many years together, which gives us the confidence to take a long-term view. In terms of investment process our approach begins with a few basic rules: never invest in stocks we haven't visited; never feel obliged to buy a stock because it appears we should (for reasons of size or perceived value as a market proxy, say).
What we strive to achieve, furthermore, is intellectual consistency. So we avoid businesses we don't understand or ones with discriminatory shareholder structures. Working from these precepts, stocks become almost self-selecting (provided we have done the essential investigative work). The more difficult decision is how much to pay. Here we place little value in ephemeral events or market 'noise' and more on factors that will ensure we can add value in a demonstrable and consistent way over time. In short, we focus on what we can know, and have built our investment process around that.
e-fundresearch.com: Which benchmark is most relevant and how should investors compare the fund vs. benchmarks or peer groups?
Jeremy Whitley: FTSE Europe
We are benchmark aware but not benchmark driven; if we find a disproportionate number of companies we like within any one sector, we are prepared to move significantly above benchmark weighting, and will similarly underweight a sector if we are unable to find companies that pass our criteria. It is important that we highlight these possible instances of deviation from benchmark as it can lead to short term divergence in benchmark relative performance - for some clients, this can be deemed to be 'risky', hence our reiteration of the possibility of such outcomes.
e-fundresearch.com: Which performance did you achieve for the fund YTD and over the past five calendar years in absolute terms and relative to relevant benchmark or other reference indices?
Jeremy Whitley: Over the last year (to 31 December 2012) the fund returned 16.5% underperforming the benchmark (18.8%) and peer group (17.7%). Over five years the Fund declined by 2.3% per annum compared to a fall of 1.7% from the benchmark and 3.5% from the peer group.
e-fundresearch.com: What motivates you in your job?
Jeremy Whitley: My team. I enjoy seeing them get better year after year.
e-fundresearch.com: Which other profession would you have considered apart from becoming a fund manager?
Jeremy Whitley: A teacher of English literature. All life's troubles, triumphs and characteristics have already been described and documented. They just remain to be discovered by the next generation.
e-fundresearch.com: Many Thanks!
