WE ARE DEDICATED TO THE ADVANCEMENT OF SUSTAINABLE, WORLD-CLASS GLOBAL BUSINESSES ADDRESSING THE NEEDS OF LOCAL POPULATIONS.
We believe companies that solve social problems improve human living conditions. As such, they should be naturally aligned with host governments, minimizing a source of political risk frequently encountered by emerging market private investors.
Moreover, principled and pragmatic integration of environmental, social, and governance (ESG) factors – as measured over time to determine impact and outcomes – increases upside and reduces downside by further aligning interests with local stakeholders and international norms.
We believe these and other objectives are best achieved by working cooperatively with management, other shareholders, and all company stakeholders.
Given the need to process and balance a wider range of local and jurisdictional variables in emerging markets, control is not an absolute requirement. A consensus-driven approach among a control consortium comprising investors with shared values and objectives can also be effective.
AS FIDUCIARIES, WE ARE COMMITTED TO VALUE INVESTING, SEEKING GENUINE ALPHA, i.e., ATTRACTIVE RETURNS, AND POSITIVE DIVERSIFICATION BENEFITS (LOW CORRELATION).
One of our primary goals since inception has been to convert the steadily developing, but still inherently fragmented and inefficient, emerging market private investment landscape into a relatively new source of alpha for investors.
As such, we seek to capitalize on discrete market inefficiencies and pockets of capital shortage rather than following the crowd into popular and potentially overcrowded growth-oriented macro themes, especially at high entry multiples.
Our disciplined insistence on value, consistent underwriting standards and focused risk management seeks to deliver a steady uncorrelated return profile that relieves our investors from the notoriously difficult task of trying to “market-time” the asset class.
We seek for each deal to deliver an asymmetric return profile, with a worst-case return of capital and a best-case, equity-level multiple of original capital. Each deal therefore is designed to be inherently uncorrelated to any index, and any portfolio of deals naturally follows suit.
The conventional EM private equity ("EMPE") industry, spawned by development finance institutions approximately 30 years ago, has struggled to generate attractive absolute returns or positive diversification benefits (low correlation to widely followed and accessible indices).
Moreover, many investors seek to mitigate emerging market risk through broad (over) diversification. This approach is little better than market timing as it carries the danger of replicating the volatility of the MSCI EM index, which few investors can withstand. Indeed, the MSCI EM has historically delivered insufficient returns relative to its volatility and does not include some of the most compelling emerging market themes, which can only be accessed in private markets.