Investing in purposeful growth in emerging markets
What We Do
Arisaig Partners aims to deliver long-term, compounding returns to professional investors by investing in listed equity businesses that access purposeful growth in emerging markets.
Purposeful Growth is an organisational principle which requires businesses to think about the overall value creation of the enterprise across multiple stakeholders, including customers, employees, the environment, and local communities.
This is all we do.
Who We Are
Arisaig Partners is an independent, founder and employee-owned, investment management boutique established in 1996 in Singapore. We are headquartered in Singapore and also have research offices in India and the UK.
We manage portfolios of high quality, high growth listed businesses, which by creating value for multiple stakeholders, will earn the right to capture the full extent of emerging market growth over the coming decades.
The firm is managed by the second generation of partners who each hold an equal stake in the company and have been with the firm for over a decade. Our research team is spread across three offices, providing us with the reach and specialised focus required to truly understand and engage with a diverse range of emerging market opportunities.
We aim to hold ourselves to the same purposeful growth ideals we expect from our holdings, and align our own business to the ultra-long-term time horizon of our investments. We were the first Asian-based Signatory of the PRI, have been carbon neutral for over a decade and founding signatories to the Net Zero Asset Managers Initiative in 2020. As of 2021 we are a certified B Corporation.
We believe our ‘edge’ as a firm is our proven long-term mindset. Over the last 25 years we have established a process and culture designed to capture multi-generational opportunity.
We use an investment committee structure to ensure collegiate decision-making
We focus on fundamental research from a global research team of 20 investment professionals
- Long-term minded
We invest for the long term in businesses that address the needs of all stakeholders
We follow an established, integrated investment process with discipline
We foster a culture that embraces diverse perspectives and encourages constructive challenge
Purposeful Growth: what it is, and why we seek it
Nearly 25 years of experience investing in emerging markets has taught us that Purposeful Growth enterprises tend to deliver superior financial performance and superior long-term shareholder returns. Their cultural attributes also tend to be hard to replicate, giving them significant and sustained competitive advantage.
‘Purposeful Growth’ is an organisational principle which requires businesses to think about the overall value creation of the enterprise across multiple stakeholders, including customers, employees, the environment, and local communities.
We believe that markets are poor at evaluating the long-term growth prospects of great companies because our industry’s incentive structures are ill-suited to recognise compound growth over long periods – still less if that growth is non-linear. Such discrepancies create pricing inefficiencies that are exploitable by investment managers who themselves can adopt Purposeful Growth investing and organisational principles.
Purposeful Growth businesses are motivated not by short-term profitability but rather the value they create customers and society. Therefore, while not ethically perfect (we doubt such entities exist), Purposeful Growth businesses take a multi-stakeholder view of the world that lends them the ability to chart the right course. This is a source of competitive advantage in our ever-changing world.
Three traits of purposeful growth companies
1.Products/services which benefit customers and society
2.High stakeholder value creation reflected in high returns on capital employed
3.Reinvestment with purpose
Finding Purposeful Growth businesses is hard. Our values underpin our investment universe construction, allowing us to focus our resources on a tight list of businesses. This means we can identify the attributes of Purposeful Growth in companies that may ‘screen’ poorly due to limited disclosure or inaccurate market-data.
To understand a company’s long-term potential we adopt a 360° research ‘mindset’ and review potential investments from the perspective of all possible stakeholders. We closely analyse the operations, industry context, sales channel and end consumer of each company, in order to form as full a picture as possible of its long-term trajectory.
The companies within our universe enjoy sustainable competitive advantages and their management teams allocate capital with the long term in mind. These businesses deliver high, durable ROCE and generate substantial cash flows, enabling additional avenues of growth to be created. In other words, they are in control of their own destiny.
We have integrated ESG analysis since our inception, developing a much more sophisticated understanding of E and S factors since becoming the first Asia-based signatory to the UN PRI in 2010. We do our own homework, understanding that standardised disclosure is often weak in the emerging markets context, rendering third party datasets unreliable on their own.
It is our belief that the best possible investment outcomes for Arisaig and our partners will result from patient, deliberative, strategic allocation of capital towards the purposeful growth businesses best positioned to succeed over the long-term.
This ‘endurance investing’ approach is best reinforced by a collaborative, research-driven decision-making structure. Trades should be infrequent, following debate, discussion and ‘fair and sophisticated criticism’ of potential allocation decisions. We see low portfolio turnover as a virtue.
Arisaig has always followed a consensus-based approach to decision-making, eschewing an overreliance on individual portfolio managers and the ‘sharpshooter’ approach prone to impulsive, short-termist behavioural pitfalls. We take investment decisions by using an Investment Committee (IC) structure which is chaired by our Singapore licensed investment management entity and made up of partners. There is a separate sub-IC per each strategy in order to ensure accountability within the collegiate IC structure.
The IC represents the final stage of a long, team-based research process which builds towards investment consensus. Nonetheless, we believe it is important to reinforce the behavioural benefits of collective decision-making at this final stage of the process through the formal committee structure.