Aberdeen to Start Offering Mutual Funds in Q2, Pending OJK’s Green Light
MARCH 27, 2015
Jakarta. The Indonesian unit of UK-based Aberdeen Asset Management plans to start offering its signature mutual fund for retail and institutional investors in the next quarter, as it embarks on a path to serve the local market and become one of Indonesia’s 10 largest mutual funds by 2020.
The plan follows a steady transition after Aberdeen acquired 80 percent of local asset management firm NISP Asset Management from NISP Sekuritas, the securities arm of OCBC NISP Bank, in September, and renamed it PT Aberdeen Asset Management.
Sigit Wiryadi, PT Aberdeen Asset Management’s president director, said in an interview on Thursday that the company would relaunch six NISP mutual funds — including equity, fixed income, balanced and money market funds — under Aberdeen’s brand in the next three months, pending approval from the Financial Services Authority, or OJK.
The fund manager has been adjusting the funds to comply with Aberdeen’s simple and long-term-oriented investment philosophy.
“Last year we threw away a lot of junk, or stocks that didn’t pass Aberdeen’s screening test,” said Bharat Joshi, investment adviser at PT Aberdeen Asset Management. “I like to say we put a Rolls-Royce engine in an Avanza,” he added, referring to the mass-market Toyota minivan popular in Indonesia.
Aberdeen, which manages $515 billion globally, takes pride in its discipline to invest in simple-to-understand companies, with little debt and a healthy cash flow, Joshi said. The companies must be transparent to minority shareholders and have a “driven and passionate” leader, he said.
“Even when you have those five key recipes, then you have to look at valuation,” Joshi said. That approach has shielded Aberdeen’s long-term gain against sharp declines in the market, he added.
“Being long-term investors, especially having going through the cycles in Indonesia, we know how cheap things can eventually be. So if things are too expensive than it’s OK [to pass on them],” he said.
Having invested in Indonesia since 1987, Aberdeen Asset Management now has $4.7 billion in the country’s equity and bonds, or 3.9 percent of its Asian assets.
Sigit said Aberdeen’s conservative approach would put it among the top 10 asset management firms in Indonesia, competing with the likes of Schroder Investment Management Indonesia, Manulife Aset Manajemen Indonesia, and Eastspring Investments Indonesia.