George Birch Reynardson
We launched the Somerset Frontier Markets strategy on 2nd December 2013, with a UCITS vehicle launched on 13th July 2018. Liquidity conditions mean that the capacity is constrained. There is currently around $300m of remaining capacity in the strategy.
- A conviction-driven portfolio of 40-50 stocks which offers a blend of growth and value.
- We look to take advantage of the strong structural growth prospects in frontiers by selecting industry champions with the competitive advantages required to compound earnings over the long-term.
- These ‘compounders’ do not require substantial leverage to grow and have a record of prudent capital management. They are bought when trading on reasonable valuations given their growth profile.
- A secondary part of the portfolio is reserved for ‘value opportunities’, companies that are either turning around or have yet to be discovered. These stocks are trading at steep discounts to their intrinsic values.
“When we look at frontier markets today, they remind us of emerging markets in the 1990s when we first started investing. The institutions in these markets are immature, the industries are underpenetrated and the stocks are under-covered and underappreciated. All this makes for an extremely compelling investment opportunity.”
George Birch Reynardson – Lead Manager