2025
January
In January, we had meetings with the management of companies from Argentina, Brazil, Egypt, and Mexico, which ranged from $300m to $5b in market capitalization and represented a diverse spectrum of industries such as power generation, logistics, commercial printing, hospitality, fintech, real estate, brokerage, and pharmaceuticals.
This month, we increased our position in a $2b electricity producer and distributor in Argentina. Benefiting from the country's president's highly ambitious – and so far noticeably successful – economic turnaround and free market agenda, this company is well-positioned to substantially grow earnings this year. Listed in the US, its stock – trading at 12x LTM P/E – is attractively priced, given the ongoing and the planned future deregulation initiatives in Argentina’s power sector which give electricity producers much greater freedom to set their own prices.
We sold a Thai food manufacturer after a series of red flags. For example, we could not find its products in the global stores where they were supposed to be sold, and the management also refused to show us the food production factory – usually public companies are proud and eager to showcase their assets and facilities to investors, unless they are hiding something. In the end, the firm failed to deliver satisfactory quarterly results, which only confirmed our suspicion that it was not doing well.
February
In February, we made research trips to the UAE and Egypt. In Abu Dhabi, we met with the CFO of a $20b prime real estate developer which dominates the market in its wealthy emirate – boasting a tremendous project backlog – while also expanding into Dubai’s booming property market. This stalwart of top-quality development has recently issued an impressive multi-year earnings growth guidance of 35% p.a., indicating a 2027 P/E of 4x – a bargain.
In Egypt – where we sensed an upbeat market outlook – we met with the CEOs of two growing undervalued companies trading under 9x LTM P/E. One is an investment holding which operates hospitality assets; it also owns and is developing Egypt’s most valuable land in El Gouna by the Red Sea: this land alone is worth over $1b, implying a steep sum-of-the-parts discount for the company whose market cap is only $450m. The second firm is best known for manufacturing cars for a Korean brand at an impressive factory which we toured meticulously; however, it also owns a fast-growing fintech business serving customers in Egypt and Turkey whose value alone exceeds the entire parent company’s market cap of $350m.
We also visited the Egyptian stock exchange where we learned about improving market liquidity from a senior manager, and we gladly toured the EGX museum in old town Cairo, appreciating the charm of this storied institution established back in 1883.
March
In March, we made a research trip to Turkey where we met with the management of several local companies, including a $200m electrical contractor that managed to nearly triple its backlog of works in the past 12 months; a $400m investment holding that owns the world's largest independent cruise port operator which it recently privatized at a very attractive valuation through delisting from London Stock Exchange; and a $100m cash-rich luxury leather goods manufacturer, retailer and exporter that should benefit from comparatively advantageous tariffs that the US imposed on Turkey. All three are very cheap and continue growing despite any macro noise.
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We had to sell another Turkish company, an e-commerce business. While still cheap compared to its global peers, it started experiencing a slowdown in sales. Additionally, we sensed corporate governance concerns after the company's new owner from Kazakhstan failed to treat fairly minority shareholders like us at the time of acquisition.
This month, we emailed all portfolio companies and asked about the impact of the US tariff rhetoric on their businesses. We were satisfied that at the portfolio level there is little concern about the potential tariffs. However, we will keep re-engaging with our portfolio companies on this subject matter, given the unpredictable, chaotic nature of tariff announcements of the current US administration.
April
In April, we made a research trip to South Korea where we met with the management of a $400m online game developer. We believe the company's stock is well-positioned to defy gravity and finally take off after several years of post-Covid Ragnarok when its share price decreased by 75%. First, after not launching any major titles last year, the firm plans to release two big games this year, which will drive substantial earnings growth. Second, it has a huge cash position on its balance sheet equal to the entire company's market capitalization. Third, a well-known activist investor is currently engaging with the firm's parent company in Japan, which can drive shareholder value creation through using the vast cash sitting idly. Fourth, it is very cheap at 8x LTM P/E (not even excluding cash). This company is truly a gem, and it is a hidden one: its shares are listed in the US where domestically focused investors have not managed to play it well and unlock the next level in its stock price history – yet.
This month, we continued engaging with our portfolio companies as well as hundreds of other businesses in our investment universe to assess the impact of the US tariffs on their operations. As a result of what we learned, we invested in a Malaysian technology champion which is unaffected by the tariffs: trading under 10x P/E and foraying into AI, this firm is working on implementing digital IDs in Malaysia, and is expanding its tech initiatives in broader Asia.
May
In May, we had meetings with the management of 31 companies from Bahrain, Brazil, India, Kuwait, Malaysia, Pakistan, Philippines, Saudi Arabia, Taiwan, Turkey, and Vietnam, ranging from $100m to $4b in market capitalization and representing a diverse spectrum of industries from jewelry to reinsurance. We were impressed the most by bottom-up opportunities in Brazil, where we identified several cheap companies trading under 8x LTM P/E with earnings growth potential significantly over 20%.
This month, we made a research trip to Southern Europe for due diligence of assets owned by the fund’s portfolio companies from Turkey and Kuwait. We met with the management and toured one of the largest cruise ports in the port-folio of the world’s largest cruise port operator, a $400m company from Turkey which manages 34 cruise ports across the globe, including the world's third-busiest cruise port in Nassau, Bahamas, as well as Europe's largest cruise port in Barcelona. We also met with the management and toured several hospitality assets of a $650m Kuwaiti investment holding, which included Europe’s largest mixed-use development operating under the Marriott brand. Both companies’ assets are run in a highly professional manner by expert managers and are positioned for further growth through operational enhancements and continuation of strong travel demand in the south of Europe.
June
In June, we made a research trip to Turkey for a deep study of our most exciting investment story this year. In mid-April, a devastating frost damaged a third of the Turkish hazelnut crop; before the harvest begins in August, there will be additional damage to the crop from the stink bug that has become widespread since its first appearance in Turkey in 2017, as well as from the heat waves that have become more frequent and severe in the last six years. Combined, these factors can result in a total Turkish hazelnut production loss of over 40% this season, essentially reducing the entire global hazelnut supply by around 28% (given that Turkey produces close to 70% of the world's hazelnuts) and leading to an unmatched hazelnut supply squeeze. Last time a comparable frost happened in Turkey in March 2014, and the hazelnut prices increased from $7 to $21 per kilogram in 12 months then due to a major supply shortage. This time the magnitude of hazelnut price increase can be even greater as the demand for Turkish hazelnuts increased by 32% since 2014 while the supply capacity is similar.
We identified a $500m Turkish company trading at an estimated forward P/E below 10x which stands to benefit from the upcoming global hazelnut supply crisis as the only publicly listed hazelnut processing business in the world: it will enjoy substantial inventory revaluation and much higher margins on its hazelnut sales as the world scrambles for hazelnuts to produce Nutella and chocolate bars. In addition to its classic hazelnut processing business in Turkey, the firm also owns hazelnut orchards with over 70,000 trees in Chile (the world’s fastest-growing hazelnut producer); is opening the largest activated carbon factory in Turkey this year (which can double the company’s earnings in 2027 thanks to high margins); and plans to build the only hazelnut processing plant in Chile next year.
We toured the company's main production plant and the new activated carbon factory located two hours from Istanbul. We also met with the company’s upbeat CEO and COO who are very analytically inclined: they measure stink bug activity by using smart bug traps that compile all infestation data into an online dashboard, and run probabilistic weather pattern models that help them buy inventory ahead of likely disruptive weather events. For example, this year their model predicted a major hazelnut crop damage risk after an exceptionally warm month of March led to the hazelnut trees developing much faster and thus becoming extremely vulnerable to any cold temperatures later on. The devastating April frost proved this prediction right.
July
In July, we made a research trip to Puerto Rico where we met with the CEOs of two largest listed banks in the country and toured a cruise port managed by the world’s largest independent cruise port operator listed in Turkey. Puerto Rico’s economy is witnessing a renaissance after a devastating 2017 hurricane as substantial new infrastructure development and favorable tax policies are driving an increase in population, which provides a solid backdrop for the local firms’ strong earnings growth.
This month, the fund increased weights in two Turkish companies. One is a luxury leather goods producer with cash equal to a third of its market capitalization. It is ramping up a high-tech factory in Italy amid great demand from luxury producers: as a result of major recent scandals that exposed the world’s top luxury names’ use of sweatshops near Milan with undocumented Chinese workers, the luxury brands are now turning en masse to this company which is run in a transparent fashion, employs local Italian villagers in Tuscany, and has dozens of years of experience in the luxury industry.
The other is an electrical contractor with a large backlog of projects, an 8x LTM P/E valuation, and a 40%+ EBITDA margin. It is poised to benefit from a recovery in the Turkish economy in the second half of the year – a recent larger-than-expected interest rate cut by the central bank is only helping.
August
In August, the fund grew +8.5%, supported by individual stock picks benefiting from the US tariffs made earlier this year in response to the “Liberation Day” crisis. The month’s best performers – a cleanroom engineering firm and an EV battery enclosure maker from Asia – more than doubled since April. We have always liked good crises because they offer highly compelling bottom-up opportunities for active managers like us.
This month’s bottom-up breakthrough made us reflect on our highly active approach since the fund’s launch in 2013. Traveling the emerging markets in search of hidden gems, in the last 12 years we have conducted 208 trips to 42 countries, and held 3,485 in-person meetings with 2,306 companies. This intense investing style with boots on the ground – exemplified by the 12 Markets in 12 Months project when we lived for a month in a different emerging market for an entire year – has been essential for the fund’s process and resulted in robust performance for the fund’s investors.
The fund’s 5-year net annualized return stands at +20.3%, ranking in the top 1% of over 1,300 emerging markets funds listed on Bloomberg. The fund received three Lipper Fund Awards in a row as the best global emerging markets fund (2023, 2024, 2025), was ranked #1 out of all peer frontier funds on Citywire for 32 consecutive months between 2022 and 2025, and is rated 5 stars by Morningstar.
September
In September, we made a research trip to Poland, a stock market which has experienced growth of nearly 50% year-to-date in USD on the back of greater trading volumes due to outflows from the US into European and emerging markets – both of which Poland is. We met with the top management of two main beneficiaries of this increased trading activity.
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One was the local stock exchange, itself a $650m listed entity. Despite boasting earnings growth of over 20%, its valuation remains cheap at LTM P/E of 12x (vs 24x for the global peers) and EV/EBITDA of 9x (vs 14x), resulting in a high dividend yield of 6% (vs 3%). The CEO is working hard on closing the "Poland discount" not only by launching new products and a proprietary trading system, but also through improvements in investor relations.
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The other was a $2b online brokerage headquartered in Warsaw, which is building a trading super app for international retail investors. After growing earnings at an impressive annualized 27% since IPO in 2016, the firm is now focused on expanding its client base through higher marketing spend to compete with the likes of Robinhood: it added 500k clients last year, and is on track to add another 700-800k this year and a million new clients next year. It still trades at an LTM P/E of 10x, while its closest $3b peer listed in the US trades at 34x – speaking of the Poland discount that needs to be closed!