A bottom up valuation driven strategy that aims to deliver superior returns over the long-term.
We live in, and invest from, the heart of one of the fastest growing regions in the world. With Asia now
representing 75% of the Global Emerging Markets universe, understanding this region remains critical to
The disciplined application of our philosophy through all stages of our process creates high conviction
strategies with attractive valuation characteristics and active returns that are negatively correlated
with the peer group who typically favour a quality / growth approach.
- We believe behavioural biases drive mis-pricing. Our structure, process and tools deliberately
and repeatedly target this mis-pricing.
- A disciplined process that focuses on valuation outliers
- Our longer horizon allows us to focus on sustainable earnings
- We structure our teams to maximise challenge and debate.
- Focused and cohesive 8-member team consisting of highly experienced investors that emphasizes
research on “best ideas” rather than performing maintenance research
- Operates under a culture of challenge and debate with all members being analysts and generalists
- Our common research platform and toolset across the other 7 equity focus teams provides clients
with the best thinking from a diverse team of seasoned investors
- Prices frequently move more than justified due to shifts in investor risk perception and
- True underlying value is not always reflected in prices
- Opportunities exist – emotional detachment, rigorous analysis and discipline over a longer-term
horizon allows us to exploit these opportunities
Our investment process consists of four stages: Idea generation; fundamental analysis; portfolio
construction; risk control and review. Proprietary screens are first used to identify valuation outliers
to systematically exploit behavioural sources of mispricing. The GEM Focus team then conducts extensive
fundamental research to validate the screen’s signal using a differentiated approach to valuation by
focusing on a company’s ability to generate sustainable earnings. Stocks that pass through this process
with high upside potential and high shared conviction make it to the team’s Conviction list. Stocks from
this conviction list become the core positions in our GEM strategies. Risk control and review is
embedded at all stages of the process and conducted by the GEM focus team itself, senior management and
our independent risk oversight team.
The team incorporates ESG issues into its fundamental analysis and decision-making process (in cases
where these factors could have a material impact on a company’s valuation and financial performance).
This process relies on a proprietary fundamental research process to assess all material factors. The
team engages with the companies they have invested in and vote their proxies on all resolutions (except
when it is not in the best interests of a client). Specifically:
- The team explicitly incorporates relevant ESG issues into every aspect of their activities as
fundamental equity investors, both before making investment decisions as well as during the time
an investment is held in the portfolios
- As responsible stewards of Eastspring’s clients’ assets, they maintain a dialogue with the
entities invested in (where this is feasible)
- The team utilises third-party ESG data and research vendors in order to assist with the due diligence and ongoing monitoring processes.