abrdn UK Mid-Cap Equity
abrdn UK Mid-Cap Equity is a high-conviction strategy which invests in medium-sized companies for the long term. It invests in businesses when they are well established, but still have a long runway of growth potential. The process leans on ASI’s quant screening tool, ‘The Matrix’, and is backed up with rigorous fundamental research and regular company meetings.
Previously ASI UK Mid-Cap Equity
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Abby Glennie is Deputy Head of Smaller Companies at abrdn, leading UK Mid-Cap strategies and co-managing UK Smaller Companies strategies. She joined abrdn in February 2013, initially working on the UK Large Cap desk before moving to Smaller Companies in January 2016. Abby was appointed Deputy Head in early 2020 and also helps lead the Equities Charity Group. Before joining abrdn, she worked at Kames Capital as a Graduate Trainee Investment Manager. Abby holds a First-Class Honours degree in Economics and Finance and is a CFA charterholder.
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Abby Glennie is Deputy Head of Smaller Companies at abrdn, leading UK Mid-Cap strategies and co-managing UK Smaller Companies strategies. She joined abrdn in February 2013, initially working on the UK Large Cap desk before moving to Smaller Companies in January 2016. Abby was appointed Deputy Head in early 2020 and also helps lead the Equities Charity Group. Before joining abrdn, she worked at Kames Capital as a Graduate Trainee Investment Manager. Abby holds a First-Class Honours degree in Economics and Finance and is a CFA charterholder.
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Company Description
abrdn is the new brand of Aberdeen Standard Investments (ASI). It unifies the merger of Aberdeen Asset Management and Standard Life Investments, which took place in August 2017. With more than 30 locations worldwide, abrdn seeks to find the most sustainable investment opportunities globally.
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Talking Factsheet
Quote from the Fund Manager
I often find in life you get what you pay for; buy cheap, buy twice! Maybe cheap is ok if you’re buying for the short term, but long-term owners and investors are best placed with something they can rely on that will survive, grow and thrive with them. It’s worth paying up for quality.
Abby Glennie
Lead Manager
Investment process
The abrdn UK Mid-Cap Equity fund moved to the management of the smaller companies team in July 2018 and follows the same investment process as the other well-established funds managed by the desk.
The team invests in high-quality, resilient businesses that it believes offer the prospect of long-term sustainable growth. The team has known many of these companies for years, investing in the most successful companies that have graduated from its small-cap portfolios. It believes passionately in the value of fundamental research and active management, and thinks the market frequently underestimates the ability of quality companies to grow into the future for many years. These rare businesses are not subject to ‘mean reversion’ as traditional financial theory would suggest.
Idea generation begins with the Matrix screen which highlights the strongest quality, growth and momentum stocks in the universe. The Matrix includes 13 different factors, which back-testing has shown to be predictive of future share price performance. The factors are then weighted, and stocks are assigned a total score. This provides a focused list for the team to research in more detail. The team covers more than 300 stocks.
Individual regional analysts are responsible for constructing a ‘best ideas list’ of the highest conviction ideas. The team visits over 750 companies a year and all investment ideas are subject to rigorous peer review which is a critical part of the process. This acts as a disciplined check and helps build conviction.
Positions are typically initiated at 1% and the team will add to the position as conviction grows. Portfolios are built from the bottom up with the greatest weight given to the highest-conviction ideas. New cash is generally targeted towards the highest matrix scoring companies. Redemptions are typically met by selling the lowest matrix scores. Given its bias to growth, the fund typically has an overweight to technology and an underweight to industrials and real estate.
Risk
Risk is carefully monitored with quantitative tools. Portfolio risks can be broken down into industry, country, sector and factor risk. Any risk must be appropriately sized and managed. Risk consideration begins at the stock level with rigorous company research.
ESG
ESG - Integrated
ESG factors are embedded into the investment process. The goal is for the team to make better, more informed decisions which enhance returns and reduce risk. ESG factors can be financially material and need to be considered.
ESG research is primarily conducted internally by the central ESG investment function. In addition, the team makes use of external third-party research to aid its own analysis and highlight historic controversies. The team believes that the importance of ESG factors is underestimated by the market. They think ESG is a critical component of fundamental research and stock selection. They also believe in the importance of actively engaging with their companies on ESG issues.
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