“We’re not just assessing how people treat minority shareholders, but other stakeholders and the environment, too. It’s naive to think a family group that is quite happily using child labour or polluting the drinking water will treat minority shareholders well. That is a risky group and you should recognise that. There are lots of groups that may not have abused minority shareholders, but the way they built their franchise is questionable.”
There are no Chinese internet companies on the watch list, due to the lack of rights granted to foreign minority shareholders. And while Indian consumer companies fit the bill perfectly and heavily populate the list, none of them are currently in the team’s portfolios.
“There are parts of our watch list that are trading at bubble valuations,” he notes.
Since Mr Finegan’s arrival the franchise has seen sizeable growth, and being able to take in new money has set the manager apart from his former employer. He now runs a St James’s Place (SJP) portfolio previously managed by Mr Asante, meaning the SJP fund has reopened to new clients. The Henderson vehicle was also recently added to FE’s model portfolios for similar reasons.
Yet the six-strong team wants to stay small in size and the manager dismisses the idea he might want to scale up. “We want to stay a small team of like-minded stockpickers. In time we may add one or two more people, but this will never be a huge team and we’re never going to have offices in Sao Paulo and Moscow and Beijing. This is a boutique investment team supported by a large corporate,” he says.
Mr Finegan says he is content building up a book of business with “like-minded clients”. “The value of an equity is really in the terminal value, and that’s in the earnings for the next 20 or 30 years,” he says.
“If you think emerging markets are going to go up by another 40 per cent this year, you shouldn’t buy our fund. But if you think emerging markets could deliver good returns over the next 10 years – but accept that there will be bumps along the way – we have a very risk-aware approach.”
CV: Glen Finegan
2015 – Present
Head of emerging market equities, Janus Henderson
2009 – 2015
Investment manager,First State Investments/First State Stewart
2001 – 2009
Global emerging market analyst, First State Investments
