Portfolio Construction in Volatile Markets

Emerging market investing has always required comfort with volatility. Recent years have tested even experienced investors, with currency swings, political transitions, and global supply chain disruptions creating a challenging environment.

Our portfolio construction philosophy emphasizes resilience. We build portfolios designed to perform across scenarios, not optimized for any single outcome. This means diversification across geographies, sectors, and business models.

Currency management deserves particular attention. We typically invest in businesses with natural hedges—dollar-linked revenues, local cost structures, or export-oriented models. Where hedging is necessary, we use conservative assumptions and avoid leveraged structures.

Political risk requires nuanced assessment. We distinguish between regime risk and policy risk, focusing on structural reforms rather than individual leaders. Our longest-tenured investments have navigated multiple political transitions successfully.

Most importantly, we maintain significant dry powder and flexible investment mandates. The ability to deploy capital opportunistically during market dislocations has been a consistent driver of returns. Patience and discipline remain our greatest competitive advantages.