Overlooking opportunities may occur when focusing primarily on a high-level perspective.
In the dynamic world of investment, the Shant Investment Fund stands out for its strategic approach to providing excellent returns to its investors. Over the past five years, the fund's volume has surged by an impressive 95 percent, outpacing the MSCI Emerging Markets Index, which has only grown by 63 percent during the same period.
The Shant investment team's analysis process is meticulous, eliminating companies that do not exhibit strong growth. The majority of companies are cut due to a lack of progress, with many barely advancing from one cycle to the next. The team's focus is on identifying growth-strong, value-creating sectors that drive the growth of emerging countries, sectors that are relatively underrepresented in the Emerging Markets Index.
The team's analysis process is guided by key factors. They prioritise companies with quality, visibility, and predictability of earnings, favouring those with long-term contracts, recurring revenue, and predictable cash flows. Sustainable growth potential is another key factor, with the team seeking companies capable of expanding both domestically and internationally, preferring organic growth or bolt-on acquisitions over acquisition-led strategies.
Strong leadership is also a critical factor. Founder-run businesses are favoured, as founders who have successfully grown companies from startup to significant scale demonstrate effective wealth creation and management capabilities. Financial rigour and risk assessment are also crucial, with the team conducting thorough financial diligence to evaluate valuation accuracy, profitability margins, cash flow forecasts, and potential risks.
The team is cautious about investing in speculative "blue sky" stocks without proven revenue models or predictable earnings. Instead, they prefer to engage in detailed conversations with the company, its suppliers, customers, and competitors, as well as independent industry experts, to gain a comprehensive understanding of the market opportunity size and the sustainability of the growth.
Albert Kwok and Sara Moreno, the lead portfolio managers for the fund, work closely with the analysts to conduct these conversations. The team's daily work involves balancing the workload over the year, with each day dedicated to maintaining contact with existing portfolio investments, meeting with customers, suppliers, and competitors, and meeting with potential future investments and analysing them.
The ongoing costs for the fund are 0.95 percent, making it an attractive option for investors seeking long-term growth opportunities in the emerging markets. The Shant Investment Fund's strategic approach, combined with its focus on growth-strong, value-creating sectors, sets it apart in the competitive investment landscape.
- The Shant Investment Fund's focus on economic and social policy sectors that are relatively underrepresented in the Emerging Markets Index, such as the ones driving the growth of emerging countries, highlights its strategic approach towards investing.
- The team's meticulous analysis process, which prioritizes companies with strong growth potential, financial rigor, and sustainable expansion, emphasizes their strategic approach in the field of finance and business.
