Martin Gilbert, CEO of Aberdeen Asset Management, has been at the helm for 27 years, so the question of his retirement is one he's often asked. Until recently, his response was to say that he’d step down when Alex Ferguson leaves Manchester United, but he’s been quick to back-track.
“It was a terrible blunder to compare myself to Alex Ferguson the week before he stepped down, but I’m enjoying it too much to retire. The board have clear plans in place if I fall under the proverbial bus,” he said during an interview with eFinancialCareers on the sidelines of London Business School’s Global Leadership Summit. “Ferguson was a great people person, which makes a good manager. He knew when to put his arm around some people and kick others – not that you can kick people in asset management.”
This is not the only parallel that can be drawn with Fergie. While Aberdeen, like Alex Ferguson, takes a team-based approach rather than employing ‘stars’, Gilbert acknowledges that you need to be able to accommodate talent, just as Fergie did with David Beckham (until the famous bust-up) and Eric Cantona.
“We have around ten people in the team I’d regard as star managers, notably Hugh Young, our global head of equities, but he buys into the team culture. Some people can be difficult to manage, but you need to deal with them in a variety of ways,” he said.
Interpersonal skills, or emotional intelligence, are the most important thing he believes that any potential successor should have – if, and when he decides to leave Aberdeen. “You need a reasonable amount of intelligence, but you don’t need to be that clever to manage people,” he said. “It’s more important to have respect, emotional intelligence and to not be scared, if someone is going to resign, for example.”
If you want to make it as a fund manager at Aberdeen Asset Management then you need to get in early. While the firm hires at an experienced level for distribution staff, it prefers to recruit graduates and groom them into future fund managers, said Gilbert.
Aberdeen instead tends to grow through acquisition – it bought U.S. fund manager Artio Global Investors in February, as well as taking a stake in private equity firm SVG Advisors. Over the years it’s also acquired a chunk of Royal Bank of Scotland’s asset management division, which bolstered assets under management by £14bn, and bought Credit Suisse’s fund arm in 2008.
“It’s so much harder to get in these days; when I started anyone could get in as long as they knew what an asset manager was,” said Gilbert. “A proportion of people will have first class honours degree in engineering or maths, but we want well-rounded individuals. I’d rather have someone with a 2.1 degree and good team sport achievements than someone just with a first class degree.”
Still, making the cut at Aberdeen is no easy task. It takes on around 40-60 interns each year for six weeks’ work experience from May to September and they undergo evaluations in October. Around 6-7 are offered full-time positions in January.
“It’s key not to come across as arrogant or too sure of yourself, because when you first come in you know nothing,” said Gilbert. “Again, interpersonal skills are integral – I don’t select our graduate recruits, so it’s up them to impress individual managers.”
Extending the EU bonus cap from bankers to fund managers has not sat well among most asset management professionals. The New City Initiative, a group of long-only fund managers, is actively opposing the cap for fear of “unintended consequences” and there are now proposals on the table to require fund managers to pay half their bonuses into the funds they manage.
Gilbert said that Aberdeen already requires its fund managers to defer 75% of their bonuses for four years, as well as investing a proportion back into the funds. “All that will happen is that base salaries go up – total remuneration is not going to go down,” he said. “The unintended consequences of this are that the deferred element of compensation will go down, and less will go into these funds.”
In any case, Gilbert is not overly-enamoured with being lumped into the same category as bankers. “Regulating remuneration is a political move, which I fully understand because 99% of the population think all bankers should be strung up and anyone who earns over a million pounds is a banker; it doesn’t matter if you’re an asset manager.”