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FP Carmignac Emerging Markets
FP Carmignac Emerging Markets is a high-conviction fund targeting attractive growth from large and medium-sized companies within emerging economies. The team look to build a portfolio of 35-55 companies, with a focus on sectors where they feel there are sustainable, long-term growth prospects.
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Fund Managers
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Xavier Hovasse is a Fund Manager and Head of Emerging Equities at Carmignac. He joined the firm in 2008 as an analyst focused on Latin America and was promoted to Fund Manager in 2011. Prior to Carmignac, Xavier spent nine years at BNP Paribas Asset Management, where he worked as an analyst and manager of emerging and global equities. He graduated from ESCP-EAP Paris and has been a CFA Charterholder since 2004.
Haiyan Li-Labbé is a Fund Manager specializing in the Greater China markets within the Emerging Equities team at Carmignac. She joined the firm in 2011. Haiyan began her career in 2001 at Société Générale Investment Banking, where she was responsible for analyzing Asian convertible bonds. From 2004 to 2011, she was a Fund Manager and Head of Asian Projects at ADI Alternative Investments and OFI AM. Haiyan holds a Master’s degree in French from Beijing Foreign Languages University and a Master’s degree from ESCP Business School (Ecole Supérieure de Commerce de Paris).
Xavier Hovasse is a Fund Manager and Head of Emerging Equities at Carmignac. He joined the firm in 2008 as an analyst focused on Latin America and was promoted to Fund Manager in 2011. Prior to Carmignac, Xavier spent nine years at BNP Paribas Asset Management, where he worked as an analyst and manager of emerging and global equities. He graduated from ESCP-EAP Paris and has been a CFA Charterholder since 2004.
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Company Description
Carmignac is an independent European asset management company that was founded in 1989 in France. They have grown to manage over €30bn in assets with north of 300 employees. It remains family and employee-owned with the firm heralding an entrepreneurial-minded culture. They are strong advocators of active management and they embed an ESG focus into everything that they do.
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Investment process
The team focus on both the macroeconomic picture and the position of individual companies when building this high conviction portfolio of 35-55 holdings, typically with a bias to large and medium-sized businesses.
FP Carmignac Emerging Markets has a universe of some 1,300 stocks. Their objective is to identify underpenetrated sectors with sustainable long-term growth prospects, ideally aligned with the United Nations Sustainable Development Goals (SDG). This initial screening ensures that sustainability criteria is integrated from the outset.
Once attractive sectors are pinpointed, the focus shifts to selecting companies with improving ESG credentials. These companies should also generate revenue in alignment with selected SDGs, showcasing a positive societal and environmental impact. This screening based on ESG and SDG criteria excludes around two-thirds of the original investment universe.
They then target sector leaders positioned to capture growth potential. Thorough analysis includes scrutiny of business models, competitive landscapes, product range expansion, and the quality of management. Financial health indicators, like cash generation and debt levels, are also scrutinised.
The managers also meet with companies to gain a deeper understanding of their financials and ESG policies, including any past controversies.
Risk
To enhance risk analysis, a front office risk management team has been established to assist portfolio managers. At the portfolio level, the investment team benefits from access to proprietary portfolio management tools, enabling daily monitoring of the portfolio's exposure to key risks, including factors like exposure to value stocks versus growth stocks; cyclicals versus defensive stocks; geographic and sector concentration; the balance of idiosyncratic and market risks; as well as beta and adjusted beta of the portfolio.
At the individual position level, a range of risk management tools is applied. This includes daily monitoring of the investment thesis for all positions; continuous adjustments in position sizes as the risk-reward dynamics evolve over the holding period of securities; assessment of single stock volatility relative to overall portfolio volatility; and the use of drawdown flags to identify potential concerns.
ESG
ESG - Explicit
Carmignac employs its own proprietary ESG research system called START. The tool combines external quantitative data with internal qualitative expertise. Inputs into the system include external ESG assessments, company-reported data, past and present controversies and Carmignac’s proprietary analysis. The outputs are a ranking from A to E, which helps inform the investment team of the company’s ESG trajectory and suitability for the portfolio. The fund holds accreditation as an Article 9 fund.
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