Arisaig has been investing in Asia since 1996 but April 2010 is an important date for the firm as it marked the genesis of the Arisaig Asia Consumer Fund, as the various regional sub-funds were rolled in together to a single pooled vehicle. Importantly, this also marked a turning point in the sustainable investing strategy of Arisaig Partners. Ten years on we take a look back at what this has meant in practice and how we have adapted our investment process to reflect our growing understanding of this area.
Surviving the Asian Financial crisis (1996-7), the dotcom bubble (2001) and the Global Financial Crisis (2008-9), not to mention ‘tremors’ such as SARS, MERS and Bird Flu taught us a great deal about what types of companies were built to survive through varying periods of severe stress (learnings which have proven their worth yet again in the post-COVID world).
After years back-testing and introspection, as well as our fair share of mistakes we came to the realisation that there was a relatively simple formula for investing in emerging markets. This was to invest in only a handful of the highest quality business (‘Quality’) in highly scalable markets (‘Growth’) and led by long-term minded management teams (‘Alignment’). As important was the realisation that to add value to our clients, once we have built conviction we have to get out of the way. Therefore, instead of turning over our portfolio to move in and out of stocks that are the flavour of the day, we instead hold firm and stick with them for long periods, devolving the heavy lifting of compounding growth to skilled and aligned corporate management teams. With this approach we have been able to access the magical power of compounding interest.
