Friday, March 31, 2023

GQG becomes pandemic winner with $ 30 billion in asset growth

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The investment firm created by former Vontobel star director Rajiv Jain has more than doubled its assets to $ 62 billion this year, making it one of the most notable winners in the management industry. funds since the coronavirus crisis.

GQG Partners, which was created by a company of Indian origin Mr. Jain in 2016 and which manages funds focused on emerging markets, US and global equities, had net client inflows of $ 18.2 billion in the first nine months of this year, the Florida-based company said. at the Financial Times.

Those flows, plus gains from investing in its funds, took assets from $ 30.7 billion at the end of last year to $ 55.7 billion at the end of September. Assets have since grown to $ 62.2 billion this month.

While many sectors of the economy, such as travel and hospitality, have been devastated by the coronavirus pandemic this year, much of the fund management industry has thrived on the stock and bond markets. which were raised by the stimulus measures of the central bank and the government.

Schroders, Standard Life Aberdeen and Man Group all reported net inflows this year. Hedge funds, which had suffered nine consecutive quarters of net outflows, recorded inflows in the third quarter, according to the HFR data group.

GQG funds have performed well this year. Its emerging markets equity fund Ucits was up 24.2% at the end of November, compared to a 10.2% increase in the MSCI Emerging Markets index.

Tim Carver, CEO of GQG, said Mr Jain, who seeks to buy high quality companies and is willing to pay higher multiples for stocks, was “highly adaptable” and refused to stick with it. to an investment style. Many managers who have focused on “value” – cheap stocks in often outdated areas – have been caught off guard by the pandemic for much of this year, although they recovered from the ground in November.

“There is a tyranny over style boxes that doesn’t benefit investors,” Carver said. “A rigid focus on the purity of your style. . . makes it very difficult to innovate and adapt to markets. “

Mr. Jain’s style was “different from saying, ‘I’m a value investor and only buy bottom decile stocks at a price / book value,” Carver added.

Mr. Jain generated significant gains during his time at Vontobel, managing around $ 50 billion in assets at the top company, much of it in emerging markets. However, he left after a disagreement with management over the size of his fund without hurting returns.

Despite the influx of GQG clients this year, the company believes it can continue to grow, although it has started to turn down some mandates in emerging markets.

Mr. Carver highlighted the growth of capacity in many areas in which GQG invests, for example the emergence of Chinese large-cap companies. “There is a lot of headroom in front of us,” he said.


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