Environmental, social, and governance (ESG) investing is a relatively new approach that continues to evolve. ESG criteria developed gradually over the last few decades, and private fund managers must keep adapting their interpretations to meet changing investor demands.
Gaining access to managers with true alpha is perhaps the most crucial practical problem associated with private equity, but there are other issues as well. Some of the most successful manager strategies do not scale well, so investment opportunities are limited.
Emerging managers must provide investment opportunities that are clearly differentiated from well-established funds. Emerging managers must also pursue profitable niches, new technologies, and complex strategies that are not accessible in public markets.
As an emerging manager builds a fund into a more mature organization, it becomes increasingly vital to establish policies that promote growth and protect investor interests. We share best practices for reporting, annual meetings, and other ways to boost operational efficiency.
Public debt and equity markets in the United States recovered from the coronavirus crisis so quickly that many institutional investors did not have a chance to react. However, less liquid private credit still offers opportunities to participate in the recovery.
One of the most innovative ideas in private infrastructure funding is to scale and package financing in ways that appeal to investors. Many nations in Latin America had considerable success in building infrastructure through alternative arrangements with private investors.
Distressed debt offers the highest potential return of any type of debt security. Using all the available information can turn the danger of bankruptcy into the opportunity to gain control of the company.
Ashton Global has historically used ESG factors which are vital when valuing companies in emerging and frontier markets. We utilize the Five Forces Model from Michael Porter when applying ESG analysis to our investments.
The idea of investing in healthcare real estate is intuitively appealing. The healthcare and real estate sectors often outperform the S&P 500. When we look closer, a combination of demographic and economic factors supports the growth of healthcare real estate.
Bhutan combines a strong record of economic growth with an equally impressive commitment to the environment, society, and good governance. Bhutan also enjoys a favorable location between India and China, two of the fastest-growing economies in the world.
Kenya already has an impressive record for developing its infrastructure and power system. According to the World Economic Forum (WEF) Global Competitiveness Report, Kenya has the most competitive economy in East Africa.
Stock markets in Latin America are like the US markets of the late 20th century in many respects. The Latin American equivalent of the post-WWII baby boom occurred decades later, which suggests that stock valuations could increase substantially.
Emerging markets offer favorable conditions for the growth of direct lending. Direct lending is not only profitable for investors, but it also supports communities by providing more affordable credit to job-creating small businesses.
Historically, small businesses without extensive credit histories were still able to obtain loans and leases for equipment. Real estate, equipment, and other business assets could be used as collateral for loans.
There is an enormous unfulfilled demand for water infrastructure. Private investors who meet that demand may be able to earn excess returns while supporting the sustainable development of public resources.
The best investments often reveal themselves during downturns, and India has shown strength in adversity. India’s economy continued to thrive even as rising interest rates in the United States put pressure on emerging markets.
Although Asia still presents opportunities, excess returns are becoming more difficult to find as markets continue to develop. Growth is increasing in less developed countries, while former leaders are slowing down.