EMERGING MARKET SMALL CAP EQUITY
Small Cap stocks in the Emerging Markets represent an area of significant inefficiency in the broader Emerging Markets universe. Traditional Global Emerging Markets (“GEM”) investment management has been dominated by a “BRICS” focused approach that overemphasized large market cap stocks that are often state owned (controlled) enterprises. As the Emerging Markets continue to grow and develop it is clear that asset allocators have started to take a more sophisticated approach to the asset class in the same way that has already happened in the developed markets. Dedicating assets to the small cap sector is an evolution in the asset class along with country, regional and sector strategies.
We use our non-indexed, focused, value oriented approach to identify individual companies that are under researched, in countries that may be misunderstood, to cherry pick the best opportunities identified by our integrated assessment of companies and the forward looking political and economic environments in which they operate. Often market liquidity in these companies is restricted and hence we constrain the assets that we will manage in this strategy so that we can execute our investment philosophy that requires rotation of the portfolio in line with the market cycles whether this is being defined at the company, sector or country level.