Veteran emerging markets fund manager Mark Mobius has teamed up with two former colleagues from U.S. asset manager Franklin Templeton to launch investment firm Mobius Capital Partners.
Carlos Hardenberg, who was lead manager for the flagship Templeton Emerging Markets Investment Trust, and Greg Konieczny, former manager of Romanian investment fund Fondul Proprietatea, which is managed by Franklin Templeton, will work with Mobius on a triumvirate investment committee.
The three will focus on companies where they can drive performance by raising corporate governance through active engagement, they said at the firm’s official launch in London on Wednesday.
The aim is to raise some $1 billion in about two to three years to invest in China, India, Latin America and other emerging and frontier markets.
Mobius, 81, who is regarded as a pioneer of emerging market investing, left Franklin Templeton earlier this year after over 30 years with the firm. But he said he wasn’t ready to retire.
“I love what I’m doing, it didn’t make sense to be really retired. It’s no fun to be sitting around,” he said, adding the aim with the new firm was to go “back to basics”.
Konieczny, who has a record of successful engagement with companies from his time at Fondul Proprietatea, said there would be an action plan for how each company’s governance could be improved.
“The best way to do this is through partnering with those companies and, from our experience, it delivers the best results in a relatively short period of time,” he said, adding this could also boost a company’s environmental and social ratings.
The aim is to launch a Luxembourg-based fund in June that will invest in 25-30 emerging and frontier market companies, initially targeting high-net-worth individuals via private banks and family offices.
Hardenberg said the fund would take fairly large stakes in companies, which might be in trouble or have fairly low ratings in terms of their governance and transparency.
He cited fintech, robotics, healthcare, e-commerce and education as potentially rich hunting grounds.
“We still see a lot of opportunities in those segments,” he said. “One of the reasons those very solid, very well-run companies are trading at discounts is because there is a general perception the risks are higher because of poorer governance and lack of transparency.”
He added the timing was good because emerging markets overall remain fairly attractively valued, trading at a discount of about 20-25 percent to developed markets.
Although the intention is to avoid the traditional “sin” stocks, such as tobacco, Mobius said he wouldn’t rule out investing in a listing of oil giant Saudi Aramco, depending on how the board was set up: “Yes, if the conditions are right.”
The three are currently hiring portfolio managers and analysts with an expertise in environmental, social and governance (ESG) investing. The aim is to build a team of about nine, including themselves by the end of the year, with a small office in Hong Kong also expected to open before the year-end.