Investment Strategy

Emerging Markets

We have been investing in emerging markets debt and equities since the early 1990s, long before emerging markets became a mainstream asset class. Our long-held conviction that countries such as Brazil deserved an investment-grade credit rating has been vindicated by the rise of the so-called BRIC countries over the last decade.

Emerging markets debt continues to benefit from the secular ascent of the emerging markets and the realignment of the global economy. Emerging markets sovereign debt is becoming the new "safe haven", as the overleveraged developed world is facing a debt meltdown which is only being delayed by artificially low interest rates and financial repression.

Emerging markets debt is still undergoing a re-rating and continues to be under-represented in the asset allocation of most institutional and private investors. We aim to take advantage of these trends by identifying the most attractive opportunities in this sector, with a focus on sovereign bonds and quasi-sovereigns, as well as selected special situations in emerging markets corporate debt.

With bond markets in the developed world in an unprecedented bubble and emerging markets bond yields at historic lows, we are generally very cautious with regards to fixed income. However, we continuously monitor and evaluate opportunities evolving in the emerging markets and opportunistically invest when others panic and yields spike to double digits.