Hugh Young studied politics at the University of Exeter before entering the investment industry. He first worked at MGM Assurance and Fidelity before joining Aberdeen Investment Management in 1985. In 1988, he was put in charge of the Aberdeen Global Asia Pacific Equity Fund, which he still runs. Four years later, he moved to Singapore to set up Aberdeen’s Asian office, and has stayed there ever since.
What is his strategy?
Young looks for high-quality companies with a sustainable competitive advantage. He places a great deal of emphasis on good corporate governance and the fair treatment of minority shareholders – these are often bigger problems in emerging markets than developed ones. He avoids strategically overambitious or heavily indebted firms.
How well has this worked?
A $1,000 sum invested in the Aberdeen Global Asia Pacific Equity fund at its inception in April 1988 would now be worth $17,200 – an annual return of almost exactly 10%. By contrast, the MSCI Asia Pacific Equity index (excluding Japan) has risen 1,038% in three decades, a yearly return of 8.5%. Aberdeen’s Asian assets under management rose 200-fold to $75.5bn between 1992 and 2016.
What were his best trades?
In the late 1990s, Young bought into the Indonesian subsidiary of the global goods company Unilever. Over the past two decades, the investment has returned over 12,284% compared with only 770% (both in US dollar terms) for the Jakarta Composite Index. This works out to an annual return of 27.6% for Unilever, as opposed to 11.6% for the Indonesian market. Samsung Electonics, the Korea consumer-goods giant, is another of his winners. It shares have returned a total of 11,162% (also measured in dollar terms) during the same period.
What can investors learn?
Young says that investors need to assess whether a company has the culture and ethos to be a long-term success, instead of just focusing on the numbers. Effective companies are about people working well together, not just assets. Avoid firms that you don’t understand or that look too good to be true.