Mr. Kotik: Aberdeen is a large global investment manager, and we work on the U.S. Equity Team. We've been with Aberdeen for over two years, but with that being said, both Mike and I came from the predecessor firm that was acquired.
TWST: Introduce our readers to the Aberdeen Small Cap Fund.
Mr. Manzo: Our Small Cap Fund is roughly 200 million in assets as of Sept. 30. It's a blended fund and invests primarily in small-cap companies, which we define as roughly 3 billion in market cap or less. We are bottom-up investors undergoing a very intensive, proprietary research process with emphases on buying businesses, buying companies and becoming stakeholders in companies.
TWST: What exactly are you looking for in potential holdings? Would you take us through your investment decision-making process and the criteria that you look for?
Mr. Kotik: Our investment process is basically something that's consistent across the world. We have a bottom-up process, as Mike alluded to, where we meet with the companies that we invest in at least once or twice per year and put together models and estimates in comprehensive stock reports. We seek out stocks with what we feel are good long-term fundamentals, and that's what we do. We only buy our best ideas. It's a diversified fund but with concentrated positions. We try to take large-size positions in companies, as we are their stakeholders and our job is to look at the quality of the business. And we look at the industry structure, the strategy of the firm, execution of management, focus a lot on the financials, balance sheet especially.
Then after we determine that it's a quality company that we want to invest in, we then look at the valuation or the price. Our job is to make sure that the price is fairly reasonable and the valuation is reasonable, where we don't have a potential for surprises without us being prepared.
Tickers included in this excerpt: ADB, CMP, DELL, DW, KMT, OMTR, PER, PVH, TLAB
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.