First of all, we have a natural interest in emerging countries given our origins. Polish and Venezuelan respectively, we are very close to our countries of birth and carefully observe their respective evolutions, over the long term. It is therefore our roots that have led us to specialize in emerging market investing in the first place and that allow us to understand the realities on the ground, of economic, social or political order, better than many others.
Why Emerging Markets?
Our objectives
Due to their less developed status and the natural willingness of their populations to enjoy “the western way of life”, emerging economies tend to grow in a dynamic fashion. The expansion and aspiration of the middle class, the improvement of infrastructure, the export of manufactured goods and raw materials, the acceleration of the capacity for innovation are among the key trends that are at the base of this dynamism.
Our first objective is therefore to capture the many opportunities linked to the growth and development of emerging countries.
The growth of developing countries goes hand in hand with cyclicality which is inherent to the emerging ecosystem, and which is mainly linked to its dependence on external funding, predominantly in USD. Historically, emerging markets went from boom to bust and from bust to boom, which typically lasted about a decade each. For investors, these cycles have meant great joy and deep pain. The functioning of the emerging machine is unlikely to change in the future, although its mechanics may change somewhat due to China's growing role in the global economy and its tentacular expansion. In addition, other shortcomings, of institutional or legal nature, increase the level of risks associated with emerging investments.
Our second objective is therefore to reduce the risks specific to the emerging world and therefore to best protect the capital of our clients, thanks to:
- a rigorous selection of quality companies with below-average business model risks
- strict valuation discipline
- a contrarian approach to portfolio construction
- an analysis of economic and liquidity cycles of emerging markets.
How the emerging markets machine works ?
