Martin Gilbert, the chief executive of Aberdeen Asset Management, describes Abu Dhabi as “a quality place”, and certainly there was plenty of quality present at a reception at the British embassy in the capital last week.
The ambassador, Philip Parham, welcomed Mr Gilbert alongside Ahmed Al Sayegh, the chairman of Abu Dhabi Global Market, the UAE’s new financial free zone that Aberdeen has chosen as the site for its Middle East headquarters. Also in attendance was a fair sprinkling of ADGM’s senior management and some movers and shakers from the Abu Dhabi financial scene.
The event marked probably the highest-profile admission to ADGM since it was declared open for business just over a year ago. Aberdeen joins about 170 companies to have ADGM’s Al Maryah Island as their home, but it is better known in the world of global high finance than most of the others.
Mr Parham understood the significance of the move.
“Aberdeen is the first UK-based asset manager to come to ADGM but it is more than that. Aberdeen is a global brand, too,” he told the guests.
Mr Gilbert – a native of the city that gave the company its name – is also one of the best-known faces in international finance. He is one of the few Brits in the upper echelons of the various financial power lists and is a serial attender at global forums, such as the World Economic Forum in Davos, where his company stands out from the crowd by using a kilted Scottish piper as a lure to its soirée.
It was there in Switzerland earlier this year that Mr Gilbert first said he was planning to open in the Middle East, and was thinking of ADGM as a base. The reasons for choosing the capital had not changed between then and last week’s event in the embassy garden.
“I’m impressed by the regulatory regime, by the legal framework and by the fact that Abu Dhabi seems a great place to live and work. And the fact that we’d be among the first to be here. I like to be among the first into a new place. You’ve got to be where nobody else is yet,” he said.
The search for first-mover advantage has been a feature of his career. A lifelong fan and one-time director of his hometown football club, Aberdeen, his judgment in financial matters proved shrewder than in sport, when in 1983 he and some investors bought out a Scottish investment trust that was eventually renamed Aberdeen Asset Management.
About nine years later, after a listing on the London Stock Exchange, he was considering his first initiative overseas and was looking eastward.
“We decided to set up out Asian operations in Singapore, which was not an obvious decision in 1992. All the talk was of Hong Kong and I checked it out. But we went for Singapore, not least because you have to wear a jacket and tie in Hong Kong, whereas Singapore was a bit more relaxed. We’re celebrating our 25th anniversary there next year, so it was obviously the right decision,” he said.
In that time, Aberdeen has gone from being a company with US$100 million under management to where it is today, operating in about 25 countries with assets of more than $300 billion in its care.
He says the similarities between Abu Dhabi now and Singapore back then are striking. “The regulatory environment, the professionalism, the enthusiasm, all these things are important. Both are quality places,” he said.
With Abu Dhabi’s vast wealth, it was natural that asset management should be high on the list of ADGM’s early priorities. Companies that have become members have been attracted by the prospect of tapping into the capital’s huge financial funds, but Mr Gilbert says that there was no promised “incentive” behind its move to ADGM.
“We know the Abu Dhabi Investment Authority of course, but that was not the reason for the move. It would be a flawed strategy to come here just to manage one fund. We had no local alliance when we moved to Singapore, although since then we’ve taken on one of the sovereign wealth funds as a client,” he says.
Did he consider the low oil price a deterrent to his plans in the Middle East? “It’s the reverse really and it made us more interested. The time to invest and open offices is when conditions are a bit tougher. This is a long-term relationship,” he said.
He believes the Middle East will be a long-term driver of global growth. “The low oil price is a short-term issue but I’m encouraged by how policymakers are looking to diversify economies. This will create opportunities for investors across all asset classes and a range of sectors. In time, I can see us possibly launching funds investing specifically in the region.”
In any case, the oil price is a comparatively small item on a risk-laden global agenda. The US election result was not the shock for him as it was for many because he already had a relationship with the president-elect. “I know him from golf. His election has seen the usual knee-jerk reaction from markets when there is surprise and uncertainty. But I think he’ll be a far more pragmatic president than some of his campaign rhetoric may suggest. That was not the real Donald Trump,” Mr Gilbert said.
Europe looms larger on his horizon over the next year. “Elections in the Netherlands, France and Germany may well have a bearing on Brexit negotiations and on the future shape of the European Union. So political risk will remain a firm part of the investment landscape for the foreseeable future.”
Another key topic is the continuing policy of the world’s central bankers. “The Fed is in tightening mode in contrast to the European Central Bank and Bank of Japan, which are likely to continue with monetary stimulus,” he said.
He believes any sign that quantitative easing is beginning to fade will be an opportunity for asset managers to become more active, whether in fixed-income and equity markets or by diversifying into real estate and other alternative investments. China will remain on investors’ radar as it transitions to become a domestic demand-driven economy.
Last year, there was speculation that Aberdeen might be for sale but, while Mr Gilbert would not rule that out completely, he said it was “more likely we’ll be the consolidator, rather than the one who gets consolidated. Consolidation is happening globally. You’ve got to have scale.”
But for that time being, he will be concentrating on making the four-man team in Abu Dhabi a successful addition to the Aberdeen global business. “And if we can help Abu Dhabi by coming here, that’s good too,” he added.
fkane@thenational.ae
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