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Peter Higgins 00:17
Hello and welcome to the Investing Matters Podcast, today our Investing Matters global audience we're in for an absolute treat because this interview is with one of the true Scottish UK and global heavyweights of the independent asset management industry.
None other than Martin Gilbert FRSE, co-founder and former CEO of Aberdeen Asset Management, and the executive chairman of AssetCo PLC (ASTO), a holding company of a group of wealth asset management companies, a company that's primarily involved in acquiring and managing and operating wealth management activities and interests.
Now, I can't go any further before I say this, Martin has a prestigious and long history in the asset management industry and my question is not what is FRSE?
What, Why, Martin? Hasn't thus far been given the achievement that enabled the title of Sir yet, Martin? Hello, how are you?
Martin Gilbert 01:21
Good. I'm good. There was a Sir Martin Gilbert, which was the author.
And yeah, I used to get mixed up with him. I was I remember, I was in Washington once and they said, welcome back Sir Martin, we've given you your usual upgrade. I didn't bother telling them I wasn't the real thing. So thank you. Thank you for the intro. It's a pleasure to be on the show, Peter. So yeah, looking forward to it.
Peter Higgins 01:52
Thank you very, very much.
Now I will explain for those that don't know, because I didn't know before this that the FRSE is a Fellowship of the Royal Society of Edinburgh, which is granted to individuals that have to the Royal Society of Edinburgh have shown national standards globally by recognising imminently distinguished individuals.
So very well done there Martin amongst all your many, many, many other awards that you've had.
Martin, I want to start if I may, with the conversation that led you and your co-founders around May time 1983 Aberdeen FC beat Real Madrid to lift the European Cup Winners Cup, John Hewitt comes on scores and historic winning goal in extra time and you and your fellow investors decide it's time for us to take that leap and start a business of our own.
Can you tell us about that? And what led to that sort of conversation and the start of the Aberdeen Trust?
Martin Gilbert 02:57
Peter, that's a really good question.
We were as you said in a European Cup final.
And interestingly, Aberdeen are the last team to beat Real Madrid in any European final, of course, the great Alex Ferguson and was our manager then so I've always bet on them when they reach the final.
But yeah, I think what we've got to remember about asset management was in the 80s, it was a really small cottage industry, there were no big fund managers, there were maybe two or three big ones like Mercury or companies like that.
And all asset managers in Scotland came out of either legal firms or accountancy firms.
So Baillie Gifford being another good example, they came out of a legal firm in Edinburgh, Ivory & Sime came out of an accountancy firm in Edinburgh.
And we came out of a legal firm in Aberdeen set up on our own with our biggest client with 100 million under management in June 1st 1983.
And that started the journey we went on, until we merged with Standard Life when we had about 350 billion under management.
And interestingly, I always say, when anyone starts an asset management business, I will say go for it and take a chance. But remember, the first billion will be the hardest.
Peter Higgins 04:37
That's a very, very good point. Very well made there. Thank you for sharing that with us and hopefully you still in touch with Sir Alex, having giving you the catalysts for your fantastic journey.
Martin Gilbert 04:47
Yeah, I always remember him saying one thing. I've always remembered it, which is he likes players with egos, they have to succeed.
And same with fund managers as well.
Some of them have to succeed. And failure doesn't enter their vocabulary.
And I always remember that and I also remember him saying, I treat every player differently.
There's not one player, I treat the same and I've always used that when I've been looking after the fund management team is treat them all as individuals and work out how you treat them what they need from you.
And that's a very, very important aspect to fund management.
Because it's a tough, tough industry being a fund manager.
You're monitored every day you see whether you're performing well.
And you've got to be supportive when things are going wrong for them and questioning when they're doing really well rather than the other way around because most people are supportive when things are going well, and quite a great fund manager you are.
And then when they're underperforming people say why? I mean, how have you done this? I mean, I didn't buy into this, it's got to be the opposite.
Peter Higgins 06:19
Brilliant now, thank you for that reply.
And we'll go back if I may, a little bit.
So I've got some questions to ask you about merging and taking over certain companies and how you look after individuals.
And I want to ask that a bit later on.
But I want to go back to that bit where you say, just get started, you’re there in June 1983.
And you then take the company on you and your co-founders, you get to 1991.
And you list and that's usually a big step for any entity to take on.
So 1991, you joined the London Stock Exchange, as Aberdeen Trust PLC, you then later changed the name to Aberdeen Asset Management, but tell us about that transition from being part of a company, taking it to the IPO? And then being at the mercy of the markets from then on?
Martin Gilbert 07:09
Yeah, that's another really good point to consider when you start a company, do you take it public?
Do you stay private or not?
We probably needed to be public, because we grew the business by a mixture of organic growth and acquisition.
So it gave us the currency to make acquisition.
So often, we would do a deal that Deutsche deal or a Credit Suisse deal when we bought Credit Suisse Asset Management's a better example, they took paper. And because it was quoted paper, they were happy, they could share in the synergies they could share in the growth and also gave them liquidity when they needed it.
So yeah, it worked.
And it worked for us. I mean, I'm not suggesting for a minute for everyone that going public is the ideal solution, because there are certain disadvantages with it, especially nowadays, with governance sort of more prevalent than it was these sorts of things.
A lot of people aren't suited to the public markets and for them, I would definitely say remain in the private markets.
Peter Higgins 08:35
Brilliant, thank you for that reply.
Now, we move on to March 2017.
There, thereabouts merger between Standard Life and Aberdeen Asset Management.
Valued Aberdeen 3.8 billion, there, thereabouts, and created at the time the UK is largest asset management firm with 660 billion in assets under management.
And it was a second biggest I think, in Europe as a successful leader, entrepreneur and investor.
How does one quantify the adage of hard work, dedication time and compounded one's investment returns, Martin?
Martin Gilbert 09:15
Yeah, I don't know. I mean, I think every year when I was CEO, and I was one of the longest serving CEOs, and I would sit back at the end of the year, and even in a year where you felt you hadn't done anything, you had achieved a lot.
So it was very much for us. It was very much slow growth, what felt like slow growth, but every year we would achieve something.
So let's assume I always say it took us 10 years to get to a billion another 10 years to get to 25 billion and another 10 to get to 300 billion.
So it was funny, it was just you never really, there was never really one event that really made us or almost well, except, of course, the split cap crisis, we had 2002-2004 that almost broke us, but we became a better company as a result.
So yeah, it was just, it was gradual, rather than one big deal or anything like that. So it was just 30 odd years of really, really, really hard work.
Peter Higgins 10:45
Brilliant. I love the fact you touched on there shows your level the ability to touch on their split caps crisis there Martin, appreciate that.
What were the greatest lessons investing wise and leadership wise, from 1983 to 2017?
For you, then? You know, you've touched on this split caps, as well.
Martin Gilbert 11:05
Yeah, I think I always say to people, it's how good you are in the tough times that will define you as a CEO, not how you did in the good times, because it's very easy to ride the crest of a wave when everything's going well and you sit there and take the credit for it.
But as I say it's the tough times that make or break you.
So that period between 2002 and end of 2004. Those two and a half years were undoubtedly the toughest of my career. I offered to resign. We had a 90% fall in our share price.
But I also remember when we came out of it on Christmas Eve 2004 when we reached a settlement with the regulator, 21 firms including the HSBCs, UBSs as of this world, everyone signed up.
We were a better company as a result of that and we were much more risk averse.
So I was especially wary of geared structures.
So we didn't get into CDOs or CLOs because I thought to myself, you know, I've seen this before.
So that was the biggest lesson I've probably learned is gearing is the thing that takes you down rather, liquidity gearing, these are the things that you've got to be careful of and, and then during the financial crisis, it was all about liquidity.
Where have we invested our liquidity on behalf of our clients, this sort of thing.
So I learned a lot during that 2002-2004 period. And then after it, we did one of the best transactions we did which was to buy Morgan Grenfell Asset Management, one of the most famous names and asset management from Deutsche Bank.
And I suppose if there were two deals that really made us that would be one of them.
And one was way back at the beginning of Aberdeen in 1998, when we bought Sentinel Asset Management, and with it came the Far East capability.
And with it came that emerging market capability that we really built Aberdeen, not the backup.
Peter Higgins 13:44
Thank you for that reply and full reply as well, Martin.
Now, you touched on something there. I was going to touch on later on, I probably will still do. You've noticed.
And then you acquired the emerging market interests, which I don't think many people were looking at that at the moment, because it's so UK centric, but you and your team are like, yeah, we need a bit of exposure to that as well now.
Martin Gilbert 14:06
Well, yeah, I suppose. I mean, if I look back on one of the advantages I had in life, it was being born in Malaysia, living there for the first 10 years of my life, and also travelling back and forwards there for the next 20 years, because my parents were there, 35 years in total.
So I knew where Asia was I knew where the Far East was.
And I was there at the start of jet engines, the jet engine, transformed the Far East in the sort of 60s and 70s.
So I'm so old, I remember, I remember these things.
But yeah, I was always fascinated by Asia, obviously. And I knew the work ethic there and I was fortunate that when we bought the emerging market business with Hugh Yang, he was a guy that was passionate about Asia.
So passionate that we became one of the first fund managers to move our desk, our Asian desk from London to Singapore.
And we were one of the first to establish in Singapore.
So it was probably up there with the top sort of three, four decisions you make in your career.
And it was a remarkably easy decision to make and we were surprised no one else wanted to do it.
But to a certain extent, a lot of the Asian fund managers loved living in London and managing money in Asia.
So we took the view, our fund managers needed to be where they were investing. And it was a fantastic move for us. And as I say, really, I suppose made Aberdeen into what it became.
Peter Higgins 15:55
Yeah, very unique in that structure and like you say became the largest in the UK at one stage.
So thank you for that. I want to touch now on what you're doing now Martin, because some people say you know what, you could just be chilling at the beach now wandering around the world visiting family looking exotic places.
But no, you're back in the City, you started up the asset management consolidator, which is AssetCo and going from strength to strength, you want to give us an overview of AssetCo, and talk a little bit about all the different nuances and aspects of the business for us please?
Martin Gilbert 16:31
Yeah, I suppose I knew the time was right to leave Aberdeen.
And you always want to go before you were asked to go.
So it was the right time for me to go and I'd always been interested on being on other boards.
So I was a founding director of First Group (FGP), which became one of the biggest surface transport companies in the world. I was on the board of Sky, which was fantastic.
And then I was on the board of Glencore (GLEN).
And I was offered the chairmanship of Revolut by Nik Storonsky because he wanted someone who had founded that business so, it was I was starting to think about these sorts of things.
And I also wanted to put into practice all the things I'd learned at Aberdeen so with a few of my ex-colleagues, Aberdeen who all wanted to retire of course, we started AssetCo and it's been good fun.
It's been a bit tougher than I thought it would be. The markets are tough at the moment for a small cap and the markets are tough for long only asset managers.
So I was yeah, it's been slower but I'm not sort of back taking more of an interest and I must admit, I'm really enjoying it. I'm enjoying looking at the deals again, looking at what we should be doing so yeah, there's a lot of opportunity out there, the tougher the markets. The more opportunity there is.
Peter Higgins 18:10
That’s a very good point you've made there.
Because I think it speaks to the individual that you are in the sense of the deals that you've made historically in the sense of drilling down onto the detail.
And some of these companies, now we're going to be looking for somebody to come in and actually inject some capital.
And sometimes you take steaks, and sometimes you actually look to merge with the company.
So with regards to that, what sort of detail are you looking at? That's often overlooked by other individuals that gives you that edge and your team and edge because you've been there and done it before?
Martin Gilbert 18:45
Yeah, I really, I look at what the revenue is, recurring revenue.
That's what always fascinates me, what is the recurring revenue, not performance fees, or whatever.
And I look at the quality of the fund managers and the people in the business because Aberdeen when you look at the senior management team at Aberdeen, at the end, Anne Richards came from when we bought a number of fund managers, Hugh young when we bought Sentinel, Garry Marshall when we bought Prolific, so they all came, every single one of them really came from an acquisition we've made.
And we always keep the best people, we love good fund managers, we love talent. We love good distribution people.
So we really look for quality, I think, more than anything else. So recurring fee revenue and the quality of the people.
Those are the two main things, we'd look at everything else, you can sort, basically, you can sort if there's admin problems, or regulatory problems, or whatever. But those are the two very, very important points.
Peter Higgins 20:12
Thank you for that.
Now, you touched on this a bit earlier, I'm going to talk about it a bit more now, regarding treating people differently. As an investor and an acquirer of businesses. How do you go about and your asset team go about ensuring that these multi-skilled professionals within said businesses continue to feel valued and motivated as part of your enlarged group?
Martin Gilbert 20:36
Yeah, what I did at Aberdeen was I never had an office.
So I always sat with the fund managers and I think that was quite an important point, I actually, I did have an office but never used that I used to sit down at the desk.
And if someone wanted a meeting, you would go quickly into the office and then come back out and sit at your desk.
And I think that's so important, because you can get a feel for how a fund manager is doing, what the mood is on the floor.
It's not a dealing room, an asset manager area is quieter, most people are working.
So yeah, you can just get a feel. And you could you also know who the characters are in the room and who's sort of who, who's good for morale and who's not these sorts of things.
So there's a whole aspect to it.
And I always tried to work at the far end of the room as well, so that you have to walk through the entire room to get to your desk.
I know these sound really weird sort of points, but people want to see you they want to see you there. And especially when things aren't going well.
They're very keen to see you're not completely panic stricken and a quivering wreck. So yeah, it's the small things that that matter.
I think, that ability to speak to them, then come and speak to you, you go for a drink with them if those sorts of things. They're all really, really important points.
Peter Higgins 22:26
In talking now that more about your shrewd deal making and looking into the details as a serial deal maker and shrewd, analytical number cruncher.
Am I right in saying that one of the aspects of AssetCo Parmenion was acquired via Aberdeen Asset Management during your tenure for around 50 million pounds or so.
But I've done my numbers and I'm looking at it and thinking well, the estimated value of your staking that right now of AssetCo is probably worth more than the value of your own market cap of AssetCo.
Martin Gilbert 23:01
Yeah, absolutely. So Parmenion was a company we bought at Aberdeen for 50 odd million or whatever it is.
Aberdeen had two other platforms after I left and decided sell Parmenion.
So we teamed up with Preservation Capital and bought it for I can't even remember, but sub 100 and that business is probably worth 275-300 million today.
We have about a 30% share.
So yeah, I mean, I think our steak is probably worth 75-80 million, something like that maybe even slightly more because I think there's going to be consolidation in that sector.
And it will be absolutely fascinating to see what price 7IM sells Caledonia as you know, are selling 7IM.
That's going to be a really interesting benchmark for the sector. I think it will lead to a bit of consolidation.
So yeah, I think it's a very exciting sector. Parmenion has an excellent CEO and Martin Jennings and we, to a certain extent back to him during the time at Aberdeen.
So yeah, really, really good company.
And as you say, not really recognised in the share price at the moment, but what I would say is, there's a lot of companies where value is not recognized and their share price at the moment.
So we're not unique in that, I think my view is control what you can control, run the business as well as you can.
And at some stage, yeah, share prices will reflect the reality.
But there's no point sort of looking at the share price of companies every day and sort of worrying about it, or else you start to do the wrong thing short-term, you should make the right long-term decisions and run and control what you can control.
Peter Higgins 25:09
Brilliant. I love that response. Now, you we've talked about already, the quality of the leaders that you actually buy within these businesses.
And one of the ones that I've tracked and looked at for many, many years, is the brilliant Colin McLean of SVM and you managed to buy that business recently and you've kept him on board as well, which I think is an absolute coup, very well done with that.
Martin Gilbert 25:35
I know he's brilliant and same with Hugh Sergeant at River and mercantile, him and Colin are probably similar, that great value investors, but it's been the wrong sectors to be in.
Same with Hugh Young at Aberdeen, these have been tough times for these really, really top investors.
But you've just got to continue to back them and to a certain extent, I'm a value investor, myself, and I love value investing.
So yeah, Colin has always been a fund manager I've admired incredibly.
Yeah, he's great. He's reaching, in his own terms, the end of his career. So this was a good deal for him and a really good deal for us.
And he'll phase himself out gradually over the next few years.
Look, after all the money he's made for himself.
So he's, I don't feel sorry for him, by the way, I don't feel sorry for retiring. He's had a phenomenal career.
And, and he's a really great fund manager. I think that's what I really liked about him.
He's passionate about the stocks. I think, you know, the difference between me and the Hugh Young's, the Colin McLeans, I'm more passionate about the business of asset management. They're passionate about the stocks of asset management. And they're two very, very separate things.
Peter Higgins 27:11
Brilliant. I love that response.
Now, I want to touch on the rapid growth of ETFs. Now, if I may, Martin, and your purchase of Rize ETF gave your group exposure to ETFs, one of the fastest growing assets, classes and out there for wealth management.
At the moment, can you give us a little bit more of nuanced and expand on the Rize ETF business, please?
Martin Gilbert 27:34
Yeah, I mean, I would say, you know, I've made two big mistakes during my asset management career.
One of them was not seeing when I was at Aberdeen, the rise of ETFs.
And the other was not seeing the rise of private markets.
Because those are the two areas that there has been phenomenal growth and really, so private markets have really taken a lot.
One of the reasons the long only guys are suffering so much is because of course, the big sovereign wealth funds, especially the Canadians, some of these types have been taking money out of listed markets, long only asset managers and investing them in, in private markets.
And the other thing has been the rise of passive of course, with especially with the iShares of this world, and that has led fee compression within the loan only business.
Now the area I really like is thematic ETFs because my view is ETFs are a distribution channel like mutual funds used to be like investment trusts are these sorts of things.
So yeah, I think we've probably reached the top of the open-ended fund market, we're seeing the rise of ETFs.
So yeah, it's a really interesting area, hasn't done as well as we would have liked. I mean, it's had a very tough time over the last couple of years just like all other ETF providers, markets have not been kind really I suppose to thematic ETFs but a very good company, and always been a net inflow as well, which has been great.
Peter Higgins 29:42
Brilliant. Thank you for that response as well.
I really appreciate that, you touched on the fact is a really difficult time for markets now. And for value investors etc. And even for ETFs thematics.
Everyone's having a difficult sort of 18 months in the market.
But as a long-term investor, successful investor, so where should investors and yourselves be looking for most significant growth over the next three to 10 years?
Because we're talking about investing in long-term, but a lot of them as soon as there's a hiccup, they choose not to be long-term investors.
Martin Gilbert 30:17
Yeah, I think you know, one of the trends, I've always been a great believer in going against trends. I mean, obviously, you can't buck trends, but you can also look and see what the advantages are of bucking that trend.
So one of the things we've really seen over the last 10-15 years has been the demise of what I would term UK long only mandates.
So we've seen most of the.. a) we've seen most of the pension funds in the UK disinvesting from UK equities and putting more into gilts or whatever to hedge their liabilities.
But we've also seen the move from UK equities to global equities as an asset class. So there is huge value in the UK market.
Huge value, obviously, and UK mid cap and huge, even more value in the UK small cap.
So if you can find sort of really, really good unloved small caps at the moment growing at 20% on very low single digit price earning multiples, you just need to hold them for a couple of years, and you're going to double your money.
I mean, it's an asset class, it's completely unloved and, of course, private equity are running the ruler over every single one of them and the number of them being bought are incredible.
So I expect that trend to continue and UK small-cap/mid-cap.
So I like the UK market. I've always thought the American market has been overvalued, which I've got completely wrong, of course, but so I still love ASEAN. I love ASEAN and I love India. I mean, I think of this one market above all else that I like in terms of where growth is going to be.
It's expensive, but it would be India, I think it's got everything, it's got growth, it's got reasonable governance in the companies, which they've inherited from us Brits, just in terms of the legal structures.
And in fact, they can take what we've given them and taken it to a new extreme as you know so they're better rule followers than even we are in the UK. But no, I love the Indian market.
Peter Higgins 33:06
Brilliant. Thank you for that now you've touched on the Indian market.
I want to continue that if I may, with regards to AssetCo and its various different platforms and funds, etc. How much exposure can an investor get via AssetCo to the Indian market?
Martin Gilbert 33:23
Yeah, we bought a very small business called Ocean Dial what I loved about it was it had a closed-end fund with a really good track record and India very good fund manager based in India.
So it's really good. It's a really, really good. And look. In India, you can only do it through, I would never recommend buying single stocks in India, it's too difficult for markets.
It's difficult enough for fund managers to manage money in there.
But definitely a closed end fund. So open ended funds investing in India really the way to go.
In the UK, you want to be buy, you know, you can buy single stocks. There's plenty of research on that. But yeah, that's the way to go is to buy an investment trust.
Peter Higgins 34:17
Martin I want to start now if I may, regarding ESG investing, now AssetCo have an active strategy to launch products which invest in unquoted companies, particularly unquoted companies in the ESG universe.
Please, can you expand on this for our listeners as to how can they can get access to this please?
Martin Gilbert 34:35
Yeah, I think ESG is a really, it's something that's come up, of course, and if you're an active long only asset manager, you need to take ESG into account before you invest in a company.
And it's good to see that it's not just governance any longer.
So, four or five years ago, it would just have been governance.
So it would be most of my time was fending off criticism that we voted against some CEOs salary or something like that.
So it's now expanded, as you know, to look at sustainability, these sorts of things and that's important.
You know, one of my bugbears is we sort of oversimplify it and think that sustainability is a supply side problem i.e. if we are living in Aberdeen, I obviously feel passionate about this that if we stop exploring for oil in Aberdeen, it's going to solve climate change.
My view is we've also got look upon it as a demand side problem as well, we've got to look at seeing how we can cut the demand for oil or coal or gas or whatever it is, because then the supply side will follow.
And it's been very interesting being on the Glencore board, where the majority of our shareholders want us to continue investing in coal, they want us to continue owning the coal assets, they don't want us to sell them to private equity or, or other sovereign wealth funds, i.e. coming out of the public domain.
So it's a fascinating argument and it's really, really become such a big area now over the last sort of two, three years with climate change, and how we should control what we should do about it.
And I thought Tony Blair made a very good point, I think, earlier this week, saying, look, we must work with China, that cannot be any chain, we without China, we cannot get climate, we cannot control climate change. I'm not, I'm not actually expressing myself that well. But the point he made was, China is vital to this whole area.
Peter Higgins 37:27
Brilliant. Thank you. Now, Martin touching straight on to what you've just said, there. You're the chairman of the Net Zero Technology Centre, can you tell us a little bit about that, the importance of that, and the role that you have within it?
Martin Gilbert 37:45
The Net Zero Technology Centre is based in Aberdeen.
It's funded by the UK Government and the Scottish Government.
And it's there to help with technology to invest in the technology to make both the offshore oil industry, the offshore gas industry, and also the offshore floating wind industry, these sort of areas more efficient.
And we develop the technology in conjunction with a lot of these companies, the oil companies, the gas companies, the offshore wind companies, and then we give it to everyone.
So we don't actually charge for it.
It's a really great concept and makes a difference. And the plan is to make these industries more efficient, make them more greener, I suppose to use that word, but very, very important organisation based in Aberdeen, that's I'd say.
Peter Higgins 39:07
Brilliant. Now with regards to AssetCo how are AssetCo embracing the Net Zero strategy?
Martin Gilbert 39:12
Yeah, I mean, like all asset managers, as I say, we've had to invest much, much more in ESG, much, much more in our governance and how we look at companies that we invest in, because you now our clients are demanding that we look at these areas, and especially, especially in the younger generation, as they get more money, inheriting it from their parents, or whatever it might be, or making it themselves that much more interested in impact than anything else.
So impact is going to be a big area of asset management in the years ahead, i.e. only investing in companies that are doing good.
Whereas ESG, you can invest in the Shells and BPs of this world, because they're in the eyes of investors behaving responsibly, they're going to wind down their oil, these sorts of things over a long period of time.
So it's those sorts of things, so the it's an absolute fascinating area of our business now.
Peter Higgins 40:23
Brilliant, thank you.
Now you touched on earlier, other than the ESG side of it, Net Zero side it, obviously investors want to see returns on investments and you touched on the importance of looking at recurring revenue.
With regards to investors, what are the piece of vital analytics that they need to be looking at, which are often overlooked when actually assessing because they look at all assets under management or outflows, and they need to move on to the next one.
What are they missing, the nuance of long-term investing? The detail they should drill down on?
Martin Gilbert 40:58
Yeah, there is a sort of fascination with flows within the business.
And of course, asset management is an incredible industry because it is largely a fixed cost business.
And if you're doing well, money flows in if you're doing badly, money flows out.
So hence the reason the analysts monitor flows better than we as a management team do. I mean, some analysts know our companies, the asset management companies better than we do.
It's amazing. So what would I look at again, you look at performance, and you look at how they're achieving performance, you look at whether they've got the team approach or a star fund manager approach.
Obviously, if you've got to start from manager approach, you're more susceptible to a underperformance with that or whether he leaves or whatever. If you've got the team approach, it tends to slow down decision making and maybe makes it less entrepreneurial.
But yeah, there are advantages Aberdeen, we always went with a team approach and it worked. River is more named fund manager approach and to a certain extent the retail, the direct customer or the IFA, they love a story about a fund manager. So to a certain extent, it's horses for courses in those areas.
Peter Higgins 42:37
Brilliant. Thank you. Now, I wasn't going to ask this, but I will ask it now, with regards to strategies, there's always a question being asked as to whether to go multi asset or equities?
You know, you must get caught between that conversation very often?
Martin Gilbert 42:54
Yeah I think, look, it's it depends how skillful you are, doesn't it?
And what your passion is, I mean, I'm always because I love equities.
I love these sorts of things, but multi assets are great areas.
Well, I mean, I wish I'd love to own a multi asset business. I mean, I think some of them are really excellent that great pickers of fund managers know it's a great area.
And the key is, as you and I both know, not to fall too much in love with a fund manager. And it's the same with stocks. I mean, that's why I like market makers, when they discuss stocks, they're dispassionate about the stock, they don't care what that stock does.
They're only interested in whether it's going up or down.
Whereas fund managers fall in love with their stocks, you know, can hold them too long. I've always thought that Aberdeen, we were great buyers of stocks, but we weren't that great at selling them.
So we tended to stick with them.
Because our average holding period would be 10,15,20 years. So and it was always too much hassle to sell that one and try and find another stock that was as good.
So it's fascinating business, look, we're privileged to be in the asset management business, the investing business, it's just such good fun.
Peter Higgins 44:35
Thank you for that reply.
Now, Martin, I want to ask about some personal stuff now regarding your own personal investing style, strategy, methodology, away from, you know, having your money in shares elsewhere.
Where do you invest? What's your style? Are you a lumpy investor? Do you put things in monthly? Do you just buy things whole?
Martin Gilbert 44:58
Yeah, I suppose I've always been a big investor in Asia, through our funds at Aberdeen, especially our closed end funds. So I love that.
Then I like property, I like farms, I've got quite a few farms.
So I enjoy farming, my family, my parents and my grandparents and parents before that we're all farmers.
So when my father was in the agricultural business in Malaysia, so it was really, it's more of a return to my roots that but I do I invest in, I've probably got too many private market investments.
So I've been lucky. I've made a lot of money in some of them, especially Revolut. I've been lucky there.
That was that's been a real home run Revolut. I mean, this company is remarkable.
It signs up 60-70,000 customers a day, signs up more people than PayPal now per day in Europe.
So we're over 13 million customers, so it's a remarkable business. I've been lucky enough to be an investor there. So yeah, probably too many in private markets.
But I enjoy investing. And I enjoy building businesses as well. That's what I that's my passion is building businesses.
Peter Higgins 46:32
Brilliant. Thank you for that response, I agree, Revolut’s doing absolutely fantastically well.
Now, I'm going to ask him quite a curveball question here.
If I may Martin away from investing, you've already touched on the farming side, and away from your business successes. What are you most proud of?
Martin Gilbert 46:53
Gosh, I mean, inevitably, you're proud of your family.
So I suspect that's the standard answer.
So probably what am I next most proud of? I don't know. I'm proud of some of the businesses I've helped build, I would say outside Aberdeen, First Group, these sorts of things.
I mean, we built I wish I was a better golfer. I wish I was a better skier, you know, these sorts of things.
So I'm not that proud of my golfing and skiing prowess.
But yeah, proud of I suppose I'm proud of what I've done for Aberdeen.
The image of Aberdeen, Aberdeen Asset Management really helped it not as much as Alex Ferguson did.
But yeah, I'm proud of what I've achieved of what we have achieved from an oil town in the north of Scotland, I suppose I would say.
Peter Higgins 48:06
I love that response and thank you for sharing that.
Then I think you are up there with Sir Alex, regardless of what anyone else thinks, please, can I just ask you then now, a lot of people don't know about some of the things that you actually do away from the glare of the press and all the rest of it.
But do please share some of the charitable endeavors that you are very, very passionate about?
Martin Gilbert 48:30
Yeah, I've done a lot of charity stuff.
I mean, I've helped a lot of charities in Aberdeen and so on.
I've spent a lot of time on golf. Actually one of the things I'm very proud of is, you know, Alex Salmond, the First Minister of Scotland phoned me up and said, Martin, we don't have a sponsor for the Scottish open.
This is the best week on the Golf Tour, European Golf Tours the week before the open, will you take it on as sponsor and help build it, and we built it up into the best tournament on the European Tour with the best field and really, really made it a global event.
And then we did it for the ladies, I said to our team, look, guys, we can't just do this for men's golf.
We've got to do it for ladies golf. So I suppose I'm very proud of what we've done for ladies golf. I really really love ladies golf and, and playing with the playing with the lady professionals is a phenomenal experience, because they're not hitting it 100 yards beyond you.
What they show you is they are hitting it about the same distance, but they keep it on the fairway the whole time.
So it's fantastic, I've loved helping.
I've loved helping build golf and to what it is. I'm chairman of Scottish golf, which I love. I'm on the board of the European tour. I'm on the board at Wentworth. So I enjoyed the golfing side as well.
Peter Higgins 50:07
Brilliant. I love that reply.
I love the fact you've done so much for golf and for ladies golf, but you did touch on there, again, about politics.
And I've got to ask this question. That's just me being nosy. You went to law school, the University of Aberdeen with Alistair Darling, who became the Chancellor of the Exchequer under the Prime Minister, Gordon Brown another Scot, did you ever have any interest in pursuing a political career at all?
Martin Gilbert 50:33
No, not really, It doesn't pay enough.
I prefer to work with the politicians rather than be part of them.
Because if you're part of them, as you know, they'll just kill you.
That's no camaraderie there, they're competing with each other.
So no, I'm sorry, we don't get more really, really good people into politics.
But it's look it is fantastic and Alistair Darling is a phenomenal politician.
He's one of the few that under promises and over delivers rather than over promise and under deliver.
Peter Higgins 51:24
Thank you for that. I just have to be cheeky.
Now, Martin, I've got two final questions for you.
You executed absolutely brilliantly with Aberdeen Asset Management, please, can you reiterate to the institutions, the family offices, our net worth individuals, fund managers, investment analysts and private investors that are listening to this Investing Matters Podcast, your long-term goals and aspirations for AssetCo because I noticed somewhere that one of your goals is to for it to be a FTSE 250 company, can you tell us a bit more about that and reiterate your drive for this?
Martin Gilbert 52:02
Yeah, well, like, sadly, we're a long way away from that.
But I've always been, you know, I know I'm repeating myself here.
So my view is control what you can control.
So what we'll do is execute what we can. I'm very focused on executing the deals we've done at the moment, I'm very focused on realising value for our stake in Parmenion at some stage, these sorts of things.
That's what I'm really concentrating on at the moment and then let the market decide for itself, what valuation should be placed on the company.
Because most CEOs always say their stocks are undervalued.
So I haven't come across any CEOs said his stock is overvalued recently, but I'm sure there are some out there.
Yeah, I would just execute what you can do. That's my strong advice to CEOs just control what you can control.
Peter Higgins 53:07
Brilliant. Now whilst in my final question is, how would you like to be remembered, given all the things that you've done and achieved for Aberdeen for the UK for the investment industry?
Martin Gilbert 53:20
Oh, gosh, I don't know. I can't answer that question, It's always surprised me.
You know, as I say, it's always surprised me at the end of each year, how much we achieved.
I'm amazed, honestly, it still surprises me how much I've achieved in my career. I'm more surprised than anyone else I can assure you.
I mean, apart from my family, who of course, think that I'm completely incompetent. There are lots of people who were surprised that what I've achieved, but I'm more surprised than they are, I can assure you.
Peter Higgins 54:10
Oh, Martin, you've been absolutely phenomenal on this interview.
Thank you for your kindness and humility, and for sharing your insights, I wish you the very, very best of success with AssetCo and to our global listeners, this was Martin Gilbert FRSE, Executive Chairman of AIM listed AssetCo PLC.
Martin, thank you ever so much for being on this Investing Matters Podcast with me.
Martin Gilbert 54:36
Thank you. Thank you, Peter. I'm more proud of my C.A. than I am of my FRSE chartered accountant.
Peter Higgins 54:46
That's how you got started.
Peter Higgins 54:48
It's all about the foundations, isn't it?
Martin Gilbert 54:50
Yeah that's it. Take care of Thanks, Peter. Thanks for Thanks for the time.
Peter Higgins 54:56
Thank you. Thank you for your time. I look forward to seeing you soon. Take care. God bless you.
LSE 54:59
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