The Importance of Flexibility in Emerging Markets Investing

Isaac Schwartz of Robotti & Company shared his insights into investing in emerging markets during a Q&A session at Asian Investing Summit 2019.

Isaac spoke about the importance of being flexible when it comes to investing in emerging markets. He highlighted three areas of opportunity in this regard:

• Valuation gaps between public and private companies, using the restaurant meal delivery business as an example. Isaac’s firm is an investor in privately held Menu Group.
  
• Valuation gaps between multinational corporations and their locally listed affiliates. Isaac discussed this topic by touching on the examples of local affiliates of Starbucks and Unilever, e.g., Unilever Indonesia.
  
• Vastly different valuations at different points in time.

Isaac also talked about how investors can use factors commonly perceived as “scary” to their advantage. He highlighted to areas in this regard:

• Currencies, and why hedging is unnecessary for long-term investors.
• Corporate governance concerns, which may create another layer of fear and inefficiency, thereby offering potential opportunities to long-term, fundamentally focused investors.

The full session is available exclusively to members of MOI Global.

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About the instructor:

Isaac Schwartz is the Portfolio Manager of Robotti Global Fund, which he started in 2007. Robotti Global Fund seeks to achieve long-term gains by investing in undervalued securities (primarily stocks) of companies throughout the world. The Global Fund’s largest investments are now in the United Kingdom, the United States, Kazakhstan, Indonesia, and Hong Kong. Isaac serves as a director of Menu Group (U.K.) Ltd., the leading online food delivery platform in several former Soviet Republics, and of Complete Start Inc., a plant-based health food company in the U.S.. Prior to joining Robotti & Company in 2002, Isaac worked for Schiff’s Insurance Observer, an investigative journal, where he did research on the property-casualty and annuity insurance industries. Isaac graduated from Wharton with a B.S. in Economics.