GQG Partners Global Equity
GQG Global Equity is a concentrated portfolio of quality companies, with strong growth prospects, managed in a benchmark-agnostic fashion. Their focus is on finding companies with durable future-proof earnings, rather than companies which have simply done well historically.
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Rajiv Jain is the founder and chairman of GQG, as well as the lead manager for all investment strategies. Rajiv has over 25 years of investment experience. Before GQG he worked at Vontobel Asset Management where he helped build the business from less than $400 million under management to just under $50 billion in 2016. He joined Vontobel Asset Management in 1994 from Swiss Bank Corporation. He has an MBA in Finance and International Business from the University of Miami.Two other senior portfolio managers work alongside Rajiv on all strategies. These are Brian Kersmanc and Sudarshan Murthy. Before Brian joined the firm in 2016, he spent six years at Jennison Associates, where he focused on a wide array of sectors as an analyst on the Small/Midcap Equity Research team. He began his career at Brown Brothers Harriman in 2008. Sudarshan Murthy also joined the firm in 2016. Prior to GQG Partners, he spent five years as an analyst in Asian equities at Matthews International Capital and was previously a sell-side research associate at Sanford C. Bernstein.
Rajiv Jain is the founder and chairman of GQG, as well as the lead manager for all investment strategies. Rajiv has over 25 years of investment experience. Before GQG he worked at Vontobel Asset Management where he helped build the business from less than $400 million under management to just under $50 billion in 2016. He joined Vontobel Asset Management in 1994 from Swiss Bank Corporation. He has an MBA in Finance and International Business from the University of Miami.Two other senior portfolio managers work alongside Rajiv on all strategies. These are Brian Kersmanc and Sudarshan Murthy. Before Brian joined the firm in 2016, he spent six years at Jennison Associates, where he focused on a wide array of sectors as an analyst on the Small/Midcap Equity Research team. He began his career at Brown Brothers Harriman in 2008. Sudarshan Murthy also joined the firm in 2016. Prior to GQG Partners, he spent five years as an analyst in Asian equities at Matthews International Capital and was previously a sell-side research associate at Sanford C. Bernstein.
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Company Description
GQG Partners is one of the newest and fastest-growing asset management businesses, having launched in 2016. The company was founded by Rajiv Jain who has over 25 years’ experience managing developed and emerging market equity strategies. It is a private company and is majority-owned by Rajiv. They are headquartered in Fort Lauderdale, Florida.
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Investment process
GQG's investment philosophy centres on the belief that earnings are the primary driver of stock prices. The firm recognises that there are limited opportunities for gaining an information advantage over the market and that it is dominated by short-term projections. Due to this focus on the short term, investors may overlook a company's long-term prospects, leading to mispriced stocks. GQG aims to capitalise on the mispricing of long-tailed assets, particularly companies with significant growth potential over the next five years.
With a universe of some 50,000 stocks, the investment process starts with a quantitative scoring and ranking system to identify potential investments from a universe of listed and actively traded global equities. While this system cannot fully capture forward-looking quality, it employs common metrics such as stable financials, profitability, efficiency, and economic moats to evaluate companies. The research yields several hundred companies ranked on an aggregate quality score of 1-10.
The investment team will also use their cumulative historical knowledge as one of their primary sources of investment ideas. They consider this process as an efficient hunting ground for investment opportunities due to the team's existing knowledge of the market dynamics, competition and headroom for growth of the end market.
The next stage sees a fundamental analysis of a company. The research focuses on understanding the business's ecosystem, evaluating key drivers of success, barriers to entry, sustainability, management effectiveness, regulatory environment, and end-consumer behaviour. Additionally, their fundamental research leads them to other potential stocks as they are exploring related businesses, such as competitors, suppliers, and customers. This process produces a comprehensive estimate of a company's future earnings, evaluating business earnings growth over a multi-year horizon.
The analyst team includes several former investigative journalists, providing insights beyond the traditional Wall Street sell-side model and allowing the team to identify potential risks others may overlook. They examine factors such as company culture, HR policies, environmental policies, and governance structures.
A stock is only purchased when it is trading at a significant discount to the intrinsic value estimate. The final portfolio consists of between 35-70 stocks.
Risk
GQG evaluate risk at the company level with a focus on both absolute and relative risk. While they may occasionally use such tools or proprietary analyses to gauge risk, they prefer assessing events in light of evolving market dynamics. Their risk control strategy involves diversifying by end consumers of the companies it owns. Concerning downside risk, they associate longer-term risk with the quality of a business. Low-margin and highly leveraged businesses are considered inherently risky. The team focuses on avoiding businesses with a high degree of long-term unpredictability and is cautious in modelling the future earnings and multiples of less predictable businesses, such as those in the technology sector.
ESG
ESG - Limited
GQG will not screen out companies based solely on their ESG scores or rankings. They recognise that sustainable businesses drive sustainable earnings and that ESG issues can materially impact on companies’ valuations. Their analysis integrates E, S, G, and C (culture) criteria within each component of their research mosaic to gain insight on where a business is going.
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