Dominic joined the Frontier markets team at Fiera Capital (Europe) in 2013 and co-manages the Frontier Markets, MENA and OAKS strategies. He previously held a series of senior positions at Morgan Stanley, Goldman Sachs and, from 2006, Renaissance Capital, the EMEA investment bank operating in high opportunity emerging and frontier markets. With over 30 years of industry experience, Dominic began his career in financial services in 1989, initially specialising in closed-end funds and then, from 1992, in emerging markets. Between 1995 and 2002 Dominic worked for Regent Pacific, from which Fiera Capital was demerged, where he was responsible for managing 23 Eastern European funds.
1. When and how did you start your career in the ﬁnancial industry? What brought you to the ﬁnancial sector?
I started my career in the financial industry in 1989 post obtaining a degree in Economics and Statistics. My first job was analyzing closed-end funds and Investment Trusts, many of which were investing in Emerging Markets. The start of my career coincided with the fall of the Berlin wall, and with my Hungarian parentage, I was quickly drawn to this new area of Emerging Markets.
2. How does your work on a daily basis look like and what kind of problems do you normally face as a Senior Portfolio Manager, Frontier Markets?
As Portfolio Managers, we spend a large part of our time meeting with company management. When conditions allow, two thirds of these meetings are in the emerging markets, so travel forms a big part of our daily routine. In 2019 we met with around 600 companies, of which one third of the meetings were in London and the rest in country. Last year and this year we are averaging over 1200 company meetings a year, but 99% of them are happening online.
The problems, or challenges as we like to refer to them as, are all about studying the financial statement differences across countries, taxation differences, legal differences and cultural differences so that we can assess companies in a standard global format.
3. Why did you specialise in Frontier Markets and the MENA region? what do you believe it is attractive from these Markets or areas?
Frontier and Smaller Emerging Markets are, by definition, less well researched and less well owned than larger markets. Therefore, the opportunities for our own proprietary research to come to a very different thesis or valuation than the rest of the market are much more plentiful than in more developed markets. Visiting a newly emerging market for the first time and spotting an investment opportunity that the rest of the world is not yet aware of is both exciting and ultimately financially rewarding for our clients.
4. What key principles drive your investment processes and why?
We have three key principles that define our investment process. Firstly, we need to be in countries that are either going through a positive reform process or are not at risk of a negative reform spiral. “You won’t make money buying the best stock in a bad Emerging Market” is a sound phrase to always keep in mind.
Secondly, we invest only in companies with strong corporate governance where we as minority shareholders are either aligned with the major shareholders or management or are protected through company policies or the country’s laws.
Finally, investing for us is all about the numbers. We do not invest thematically, the basis for investment for us is always the ability to accurately forecast the financial numbers of a company and most importantly the valuation at which we buy and sell that company.
5. What kind of companies are more interesting to you when trying to build a portfolio? What kind of companies would you never invest in?
Our expertise is identifying triggers for countries that are embarking on reform processes and then identifying companies that can take advantage of that reform process through its business plan. Therefore, most of the companies we invest in are domestic companies that benefit from the growth of a country in sectors such as consumer, banks, transport, healthcare, education, infrastructure and technology.
We would never invest in companies with poor corporate governance or invest in companies in countries where we were concerned about capital controls, property miss-appropriation or shareholder rights abuses.
6. Which countries within Frontier markets do you believe have more growth potential? and why?
Vietnam is our number one country pick currently. In short, the reform of the country is following the same path as China, but 25 years later. If they keep on the path, we can predict a similarly high level of growth to that which China has experienced, and more importantly, we can have a high level of conviction in our forecasts.
7. Would you give any advice to anyone wanting to start a career in the asset management industry?
You should have a passion for investing and for making absolute returns. As managers, we are heavily invested personally in our own strategies and that creates a desire to make money, rather than to just “run a portfolio”. This one attribute will set you aside from your competition when looking to enter the industry.