It is hard to separate a Scotsman from his money and Aberdeen Asset Management Asia prides itself on staying true to its Scottish roots. The Asian arm of Aberdeen, which was founded in the northern Scottish town in 1876, believes all the tyres of a company should be kicked before using it as an investment vehicle. 'We are born sceptics,' said chief investment officer Hugh Young. 'As far as I'm aware, we are the only investment house in Asia that never invests in a company without having first met the management and written our own in-house research on it. 'Sadly, it doesn't mean that every one we pick is a winner but it means we've only got ourselves to blame.' Mr Young helped set up Aberdeen's Asian operation in 1992 and it is a policy he has stuck to since then. Relying on brokerage house research can be dangerous as brokers increasingly depend on advisory and issue underwriting work rather than trading commissions to make their money, 'which means that on occasions truth gets a little obscured,' said Mr Young. Aberdeen also takes a close look at company backgrounds and rejects those where it scents the whiff of collusion with government, such as those linked to former Indonesian president Suharto. 'We try our damndest not to buy corrupt stocks on the simple basis that if you buy something corrupt it is not being run for us and they are as likely to steal from us as they are from anyone,' Mr Young said. But once Aberdeen has decided to invest, it tends to stick with it, holding a stock for an average of four years rather than trying to time buying and selling. For example, it is still holding Multi Bintang, the Indonesian affiliate of Heineken, after buying it 13 years ago. 'With the benefit of hindsight we should have traded in and out of it about 10 times but we are not clever enough for that,' said Mr Young. Despite the thorough due diligence performed on companies, Mr Young admits nasty surprises can still occur. For example, Aberdeen ran the rule over Timeless Software and bought a modest amount of its initial public offering shares before its listing on the SAR's new Growth Enterprise Market to add 'a bit of spice' to the China Opportunities Fund. But in January, a month after it began trading, Timeless stunned Aberdeen and the market by announcing it was spending 40 per cent of the money raised by the listing on swanky offices in Cheung Kong's The Center. That sent its share price plunging near to $3.15, below the offer price of $3.30. 'We had a phone call with them afterwards, quite a strong one,' said Mr Young. But in the end 'we decided to hold on and give them the benefit of the doubt'. Timeless shares have since recovered to close at $5.45 on Friday. The house believes in giving investors a broad spread across Asia in its regional ex-Japan funds to damp down market risk and provide steadier returns. For its Asia ex-Japan funds, Aberdeen casts its nets as far as India, Pakistan and Sri Lanka on one hand and Australia and New Zealand on the other. 'We are very conscious that we are portfolio managers and giving people a spread of investments rather than just betting that Hong Kong is going to be THE market this year, let's shove all our money in there,' said Mr Young. 'If you look at our portfolios you will find that geographically they have the broadest spread.' He sees Aberdeen funds as for the longer-term investor rather than those hoping to make a quick return. 'Our skill is not in getting what is going to be the next hot stock in the market,' said Mr Young. 'It is really funding a well-run [company] . . . cheaply priced relative to its prospects that over three, four, five years will make us money. 'It is a different style from a JF [Jardine Fleming], for example, who are far more market aware or liquidity driven than we are. 'People might mix and match with our style. You might buy an Aberdeen Fund and marry it with a JF fund. 'Most of our funds are steady, thoughtful funds. But I think that everything we do within the fund is explicable and transparent to our unit holders.' The refusal to take on board speculative and politically connected stocks and the wide geographic spread may have been costly to Aberdeen's performance in last year's strong rebound. Aberdeen's flagship regional ex-Japan vehicle, the Asian Pacific Equity Fund, put on 48.81 per cent in the year to February 3, according to Lipper Asia. While normally that would sound like an excellent return, the fund ranked a lowly 83 out of 89 funds in the sector. A particular drag on performance last year was a 13.3 per cent holding in Australia, the fund's second biggest country allocation after a 19.1 per cent weighting for Hong Kong. Australian stocks last year went sideways while Asia staged its powerful rebound from the crisis. The fund also put more than 5 per cent of its money in both Thailand and the Philippines, two markets which under-performed last year and were largely shunned by managers building regional portfolios. But for the fund's three-year performance, which spanned the Asian crisis, the wide geographical spread and heavy Australian holdings came into their own. The fund returned 2.89 per cent and ranked 18 out of 76 funds over the period while many of its peers were down 20 or 30 per cent. Hugh Young 1979: Graduated with a degree in politics from Exeter University. 1980: Started work as analyst for brokerage Henderson Crosthwaite, in London. 1981: Investment assistant at MGM Assurance in London, later promoted to overseas investment manager in London. 1984: Investment manager at Fidelity International. 1985: Far East investment director for Sentinel Fund Management in London. 1988: Sentinel taken over by Aberdeen Asset Management. 1992: Opened Singapore office for Aberdeen as managing director and chief investment officer.