Fidelity Emerging Markets Limited
Fidelity to take over management of Genesis Emerging Markets Fund Limited
Subject to shareholder approval, Fidelity is delighted to have been appointed by the Board of Genesis Emerging Markets Fund Limited to be the Company’s new manager. The Board intends to seek approval at an extraordinary general meeting in August 2021 and the Company will be renamed Fidelity Emerging Markets Limited. Further details about the timings of the transition will be communicated when confirmed.
Nick Price, a highly experienced and successful emerging markets investor, who has been with Fidelity since 1998, will be the lead portfolio manager. It is proposed that the Company’s investment policy be amended as follows: To achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging market companies, both listed and unlisted.
Further details will be added to this page in due course. In the meantime, we hope the information below conveys our strong conviction that Fidelity is well-positioned to deliver long-term outperformance for the Company’s existing and future shareholders.
Fidelity has developed one of the industry’s largest research operations with 425 investment professionals, covering equities, fixed income, real estate, multi-manager, technical, quantitative and derivatives and spread across various locations globally.
This underpins the strength of the emerging markets platform at Fidelity, which draws on the team’s extensive knowledge and an array of complementary skills. Expertise relevant to strategy equity research, regional specialisation, derivatives expertise, sustainable investing and deal sourcing. Investment professionals are strategically located in London, Singapore, Hong Kong, Shanghai and Mumbai.
A team of 9 portfolio managers are responsible for $27bn*, across a series of global, regional and thematic emerging market strategies.
Fidelity celebrates its 30th anniversary as an investment company manager this year, and in that time has grown the assets under management of its five existing UK investment trusts to around £5bn and established a diverse and growing investor base.
* Source: Fidelity, 31.03.21.
Fidelity believes that many emerging market companies can sustain high levels of economic growth for years to come, driven by attractive demographic profiles, immature markets, an abundance of untapped natural resources, and generally low levels of indebtedness. However, whilst these positive attributes provide a fertile environment for companies to grow their earnings, it is critical to ensure that each company we invest in can generate superior and sustainable returns on assets that permit them to fund the growth of their business, withstand competitive pressures and achieve attractive returns for minority shareholders.
With this in mind, Fidelity defines high quality companies as those that exhibit:
- Quality – high quality, well capitalised companies capable of achieving superior returns on assets, and where strong free cash flow generation can be used to either self-fund future growth or pay dividends to shareholders.
- Consistency of returns – dominant companies that can maintain superior levels of growth and profitability resulting from a sustainable competitive advantage, such as market share, technology, or cost leadership; companies which exhibit a solid track record of delivering attractive total shareholder returns over time.
- Reasonable price – attractive valuations that understate the intrinsic value of a company. Target prices are determined for every stock considered for the portfolio, reflecting each company’s sustainable level of earnings power across the economic cycle and an appropriate valuation multiple.
Conversely, it is those weaker peers who are unable to compete with the strongest franchises that are likely to fall by the wayside. Using short positions, these weaker businesses form some of the additional investment opportunities that we can take advantage of, as an additional source of performance.
Nick Price, Portfolio Manager
Nick Price led the development of Fidelity’s Emerging EMEA group, launching the team’s first portfolio in 2005. The investment process has been consistently used by the current team since it was first adopted in 2005 and remains the cornerstone of Fidelity’s emerging markets equity strategies. It was subsequently deployed by the group on a global basis in 2009. In 2011, Nick developed and led the launch of the FAST-Emerging Markets strategy, for which he remains Lead Portfolio Manager. Nick joined Fidelity in January 1998 as a research analyst covering several pan-European sectors before being selected as the assistant portfolio manager for Fidelity’s flagship European Growth Fund in September 2004.
Prior to joining Fidelity, Nick was an Accountant with SBC Warburg from 1996-1997, based in London; an FX Product Accountant with Daiwa Europe Bank between 1995-1996, based in London; a Project Accountant for JP Morgan from 1993-1995, based in London and Senior Auditor for Price Waterhouse from 1991-1993, based in Johannesburg. Nick holds a Bachelor of Commerce and Diploma in Accounting from the University of Natal and is a Member of the South African Institute of Chartered Accountants and is a CFA Charter holder.
Chris Tennant, Assistant Portfolio Manager
Chris Tennant, Assistant Portfolio Manager for the FAST-Emerging Markets strategy, joined Fidelity in January 2011 as an Equity Analyst, covering European Transportation. In October 2012, he rotated onto the London based EM team to cover EMEA and Latin America Metals & Mining stocks. In January 2015, Chris was chosen by Nick to undertake a newly created EM shorting analyst role. Since then, they have worked in close partnership to identify opportunities for the short book, initially focused EMEA and Latin America. In July 2019, Chris was appointed as Assistant Portfolio Manager on the FAST-Emerging Markets strategy. In this role, Chris’ primarily focus remains on the short book. He continues to work in conjunction with the wider team of short analysts contributing to the strategy. In parallel with these responsibilities Chris is a member of the Emerging EMEA and Latin America Equities portfolio management teams. Chris has spent his entire career at Fidelity. He holds a master’s degree in Engineering from Imperial College London.
The value of investments can go down as well as up and investors may not get back the amount invested. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. The use of financial derivative instruments for investment purposes, may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. Increased and more complicated use of derivatives may result in leverage. In such situations performance may rise or fall more than it would have done otherwise. Investors may be exposed to the risk of financial loss if a counterparty used for derivative instruments subsequently defaults. Emerging Market portfolios are likely to have, high volatility owing to its portfolio composition or the portfolio management techniques. Currency hedging may be used to substantially reduce the risk of losses from unfavourable exchange rate movements on holdings in currencies that differ from the dealing currency. Hedging also has the effect of limiting the potential for currency gains to be made.