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.