Investment Philosophy

  • Thesis

    Nearly 25 years of experience investing in emerging markets has taught us that the concept of ‘Purposeful Growth’ delivers superior operating performance for our holdings and earns them the right to grow forever.   

    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.  

    These businesses are characterised by: 

    Domestic demand focus: we focus only on emerging markets given the growth opportunity and their scale – 8/10 people on the planet live there. We invest in businesses that are as excited as us by this opportunity. 

    Long-term outlook: Our portfolios are comprised of businesses which naturally think intergenerationally and so demonstrate superior innate understanding of the scale and longevity of this growth opportunity. This enables them to sustain high levels of long duration compound earnings growth, which in turn drives share price performance. 

    Masters of their own destiny: The quality of the businesses, in terms of both financial metrics (in particular high returns on capital employed) and the quality of management teams means purposeful growth businesses are able to identify and build new vectors of growth and be able to fund this with their own cashflows.  

  • Style

    We are a long-only manager and manage high conviction, concentrated portfolios with a very long-term outlook. Our style is one of patience and we see low portfolio turnover as a virtue. We view short-term valuation metrics as a distraction and we pay little attention to stock market indices, macroeconomic swings or political machinations.

  • Portfolio

    Our preference is for businesses that are dominant in their local markets, build deep competitive moats, embrace technology and enjoy high margins and low capital intensity.

  • Responsibility

    We practise full ESG integration and constructive engagement as part of our ongoing fiduciary duty. We proactively share our views with management, with whom we meet regularly. The entrepreneurs we back understand and protect our interests as minority shareholders and take governance and sustainability issues seriously.

  • Alignment

    Arisaig is independent and our partners and founders sit alongside our investors as shareholders of our funds. We build close and lasting relationships with our clients, who value our transparent approach to communications and the openness of our investment team.

Investment philosophy

360° Research

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.

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Investment philosophy

Buy quality, hold forever

The companies within our universe are driven by predictable EM consumer demand. They 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. They also demonstrate good governance, are aware of ESG risks and opportunities, promote healthy corporate culture and have sound incentive structures in place. 

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approach-target2

We target the small number of companies found here