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Investment Philosophy – New Emerging Markets Equities

Produkt Nema


Fundamental in our approach to investing
We emphasize analysis of a company’s strategic position and the strengths and weaknesses of its business model. We consider company management to be our portfolio managers, and we therefore look to evaluate the quality of the management as well as their ability to create shareholder value. We employ DCF (Discounted Cash Flow) valuation to derive at a fair value estimate rather than attempting to guess short term price movements.

We aim to buy high quality companies which we believe are best positioned to take advan-tage of the structural changes being under-taken in Frontier Markets over the long term. 

For us, high quality equals sound underlying business fundamentals, prudent management with strong integrity and a focus on high return on capital. Naturally, we look for a significant margin of safety when assessing entry valuations.


Patient investors
We invest with an aim of long term investment rather than short term speculation. This helps focusing on what drives value, and reduces the risk of being influenced by market psychology and reduces transactions costs to our investors.


Bottom up stock pickers
Our portfolio construction starts from the bottom rather than from the top. This means we focus on identifying the right stocks to add to the port-folio rather than starting by selecting region, country or sector. This allows us to focus on our core competence – stock selection.

We are bottom-up stock pickers and our strategic analysis is focused on the underlying business case, assessment of management, review of financial health and valuation. We recognize that regardless of quality, it is very difficult for companies to perform in the long run in unstable macro and geo-political environments and therefore apply a top-down overlay to our strategic analysis.

In determining the construction of the portfolio, we follow a three step process involving: the strategic case; the valuation; and trading liquidity of the individual stock.

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Last updated: 03.31.2014