New Capital launches fourth fund in Future Leaders series

New Capital, EFG’s funds arm, has launched the New Capital Emerging Markets Future Leaders Fund (‘the Fund’) to complement its existing Future Leaders equity product range. The Fund aims to capture opportunities in the under invested Emerging Markets ex China region, taking advantage of positive demographics and a large wave of innovative companies across the regions that will be the potential leaders of the future.

The Fund is co-managed by Fergus Argyle and Chris Chan, part of New Capital’s expanding equity team. The team’s underlying investment philosophy follows the same approach as other Future Leaders funds, with the aim of investing in leaders and emerging leaders with exemplary management guiding the highest quality growth companies. Chris also manages the 5-star Morningstar rated New Capital Asia Future Leaders Fund.

"Global Emerging Markets ex. China are home to some of the most exciting and vibrant companies in the world. With innovative management teams, high degrees of insider ownership, and rapidly expanding addressable markets – in terms of both consumers and business customers – we are excited to launch a fund taking advantage of long-term tailwinds. The Future Leaders framework is an excellent approach to this dynamic opportunity set." - Fergus Argyle, Co-Portfolio Manager, New Capital Emerging Markets Future Leaders Fund.

The team defines a future leader as a company that encompasses three key characteristics. Firstly, quality management that demonstrates a clear growth strategy with an emphasis on innovation, a long-term capital allocation strategy and a good track record in managing costs and working capital. Secondly, the business needs to be scalable within a large, growing market with low market penetration allowing for structural growth, independent of economic cycles. And lastly, the company needs to offer a differentiated product, service, or process, with sufficient R&D resources and budget to be able to innovate to maintain a competitive edge.

The team utilises deep, independent bottom-up due diligence. This is supplemented with proactive ESG screening & analysis which is integrated into the research and portfolio management processes. Top-down macro analysis is also utilised to further aid risk management. This process results in a concentrated, high conviction portfolio of circa 50 companies and whilst an all-cap strategy, has notable exposure to the small-mid cap universe.

"Given the strong investment case for emerging markets ex China, namely positive demographics and the fact that these markets are typically in the nascent stages of digitalisation, we are delighted to launch the fourth fund in our flagship Future Leaders series, aiming to capitalise on the near decade lows of allocations in the EM ex. China universe." - Moz Afzal, Global Chief Investment Officer, EFGAM

New Capital Emerging Markets Future Leaders Fund