Webinar Drescher & Cie Frontier Markets: Emerging Markets mit Hebel? - August 2021 - Die Fondsplattform
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Webinar Drescher & Cie
Frontier Markets: Emerging Markets mit Hebel?
August 2021
© Mobius Capital Partners LLP 2021About Mobius Capital Partners
An independent partnership founded in 2018 to invest in Emerging and Frontier Market Equities.
The Founding Partners, Dr Mark Mobius and Carlos von Hardenberg, have been investing in emerging markets since
Overview
1987 and previously managed over $55bn in client assets. MCP’s founders and employees are the single largest investor in
the strategy.
MCP currently offers a single strategy which is capped at $2bn. The strategy is offered via a closed-end Investment Trust in the UK
Vehicle
the Mobius investment Trust (MMIT), and a Luxembourg-registered SICAV, the Mobius Emerging Markets Fund (MEMF).
The strategy is unconstrained with a focus on small- and mid-cap companies in emerging and frontier markets. Alpha is
generated through bottom-up stock selection, portfolio concentration (25-30 high-conviction stocks) with a high active
Strategy
share (>95% against the MSCI EM Mid Cap Index), and customised engagement on operational, environmental, social,
governance, and corporate culture issues with every investee company.
Since inception, the MEMF’s NAV has increased by 45.8%, outperforming the MSCI EM Mid Cap Index Net TR (USD) by
Performance* 16.2% (as of 30 July 2021). Over the same period, the MEMF delivered an annualised** net return of 14.1%, compared to the
benchmark’s 9.5%.
Carlos von Hardenberg has been Portfolio Manager since founding MCP in 2018 and is responsible for both the MEMF and the
London-listed Mobius Investment Trust (MMIT). He previously worked at Franklin Templeton Investments for 18 years, where he
Portfolio Manager
successfully managed the £2.5bn Templeton Emerging Markets Investment Trust, and the $3.5bn Templeton Frontier
Markets Fund.
The investment team consists of 5 investment professionals focused on a single strategy, with coverage split by sector,
supported by a world-class expert network, built over 40 years. Our flat and close-knit team structure allows for the extensive
Team & Culture
cross-fertilisation of knowledge. Our culture shuns groupthink and encourages creativity, collaboration and a disciplined and
patient approach to long-term investing.
*Founders C USD Share Class (inception: 24 September 2018) NAV used representatively
© Mobius Capital Partners LLP 2021 **Annualised over 1040 days between inception and 30 July 2021
The MEMF is used throughout this presentation for reference data. 2Our Companies: Top 4 Holdings
eMemory Technology APL Apollo What we look for: Quality Companies
Market Market • Sustainable competitive advantages
Country Sector Weight Index Country Sector Weight Index
Cap $ Cap $ (moats) reflected in generating returns
Taiwan Technology 3.6bn 9.3% No India Industrials 2.7bn 7.8% No above WACC over cycles
50 22
• Expanding industry profit pools
42 18
• Profit growth and increasing dividends
USD Share Price
USD Share Price
34
14
• Outstanding cultures and strong
26
10
innovation
18
6
• Engagement opportunities
10
2
• Low financial, industry and business
2
risk over 5 years
O 9
O 0
A 1
Ju 1
A 9
Ju 9
A 0
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A 9
D 9
Fe 9
A 0
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A 9
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Fe 8
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A 9
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• Strong local brands with a diversified
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Persistent Systems EC Healthcare and loyal customer base
Market Market
Country Sector Weight Index Country Sector Weight Index
Cap $ Cap $
India Technology 3.0bn 7.7% No China Health Care 2.0bn 6.2% No What we avoid:
40
2.0 • Inability to control levers of profitability
1.8
34 (global pricing, regulated, unpredictable
USD Share Price
1.6
USD Share Price
28 1.4 macro environment)
1.2
22
1.0 • Unsustainable capital structures
16
0.8 • Irreversibly poor governance
10 0.6
4 0.4
21
Ju 1
O 0
Ju 0
Se 0
M 1
M 1
A 0
N 0
M 0
20
0
D 0
A 1
21
A 0
-2
-2
2
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2
O 9
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Fe 8
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Source: Mobius Capital Partners, Capital IQ
© Mobius Capital Partners LLP 2021 As of 30 June 2021
Share Prices in USD 3MCP Invests In Emerging and Frontier Markets
Classification is based on economic development, investability and market access
MSCI’s criteria for country’s classification as a
developed, emerging or frontier market:
Economic development: Considers the
sustainability of economic development and is only
used in determining the classification of developed
markets, given the wide range of development levels
within emerging and frontier markets
Size and liquidity requirements: Determines
those securities that meet the minimum investability
requirements of the MSCI Global Standard Indexes e.g.
market cap/liquidity
Market accessibility criteria: Aims to reflect
international institutional investors’ experiences of
investing in a given market and includes five criteria:
openness to foreign ownership, ease of capital inflows /
outflows, efficiency of operational framework,
Powered by Bing
© Australian Bureau of Statistics, GeoNames, Microsoft, Navinfo, TomTom, Wikipedia
availability of investment instruments and stability of
Frontier Economy Emerging Economy Developed Economy the institutional framework
© Mobius Capital Partners LLP 2021Our Edge
Focus on a Single Strategy First-Mover Advantage
Active engagement combined with an unconstrained Offering the first strategy globally to invest in small/mid
approach across EM and FM cap names and engage with every holding
World-Class Access
Vast Network in Emerging and Frontier Markets to pre-IPO opportunities, founding families, boards,
10,000+ relationships built over 40+ years entrepreneurs, private equity and venture capital investors,
academics, industry experts and government officials
Effective Engagement
Portfolio Concentration
A team dedicated to a small group of companies allows us to
15 – 25 outstanding businesses
customise engagement efforts with every portfolio company
Skin in the Game
Significant Co-Investment
Aligned interests and independence from a large
Independent Partnership structure
corporation
Identifying unique investment opportunities
Deep Investigative Due Diligence while eliminating downside through in-depth sector
An alternative approach to information gathering knowledge in semiconductors, software, health care, and
consumer names
© Mobius Capital Partners LLP 2021
5Opportunities in Emerging And Frontier Markets
Robust Recovery Expected, especially in Asia**
FM and EM stocks remain undervalued Emerging and Developing
Advanced Economies
compared to their DM peers Economies
8 % GDP 8 % GDP
6.3 5.6
6 5.2 6 4.4
Forward P/E Forward EV/EBITDA 4
4
16 2
25.0 14.9 2
22.4 0
20.4 14 13.2 0 -2
20.0 11.6 -2 -4
12
-2.1 -6
9.5 -4 -4.6
14.2 10 2020 2021 2022 2020 2021 2022
15.0 13.0
8 Emerging and Developing
Vietnam
10.0 Asia
6
% GDP 7.5 % GDP
8 6.4 8 7.2
4 6.5
5.0 6
6
2 4
4 2.9
0.0 0 2
2
0
-2 0
S&P 500
-0.9
MSCI FM Index MSCI EM Index MSCI World Index 2020 2021 2022
2020 2021 2022
Why Growth Valuations Currencies Earnings
Monetary Trade
Stimulus Recovery
Now
Source: Bloomberg/IMF World Economic Outlook
© Mobius Capital Partners LLP 2021 *12m forward figures of 31.05.2021,
**Real GDP, annual percent change 6Performance since Inception: MEMF vs MSCI FM Index
Mobius SICAV Founder USD (NAV) MSCI Frontier Markets USD (NAV)
160.0
150.0
140.0
130.0
120.0
110.0
100.0
90.0
80.0
70.0
60.0
Ju 1
21
A 19
D 19
D 18
A 20
Se 20
Fe 19
Ju 9
O 9
M 21
N 20
M 20
Ja 0
D 20
A 20
A 19
M 19
A 19
Se 19
Ju 19
Ju 1
Fe 20
M 20
Ju 0
O 0
A 21
Ju 20
N 19
N 18
M 19
Ja 19
Ja 18
Fe 21
M 21
Ju 21
-2
2
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1
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2
-2
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Source: Bloomberg, Mobius Capital Partners LLP
© Mobius Capital Partners LLP 2021 As of 31 July 2021
Rebased at Inception: (24.09.2018) 7FM Case Study: Safaricom Country
Kenya
Weight
3.1%
Market Cap
$15.5bn
Company Overview
Safaricom is the leading integrated telecoms operator in Kenya providing voice, mobile data, 0.40
home fibre, mobile, and email services. M-Pesa, a mobile payment system which allows
customers to send money via mobile phones, is the major driver of value in the business. The
MCP starts
company benefits from a significant infrastructure and network/coverage advantage that investing
harnesses mobile data opportunity. 0.36
Investment Rationale
• ARPU unlock: Driven by fixed data quad play with fibre to home offering. Premium
Share Price (USD)
positioning vs. peer telcos, and above peer prior capex investment and subsequent positive 0.32
operating leverage.
• M-Pesa: Drives financial inclusion in a country where less than half of the population has a
bank account. Increased use drives higher commission revenues with further roll-out of 0.28
new services.
• Tech-Telco: A rare hybrid business in frontier markets. Expansion of the telco platform to
launch mobile/data services increases population’s access to payment system. 0.24
Frontier Markets Themes
• Leapfrogging Technology/Banking system
0.20
• Rising living standards: Increased demand for financial/communication services
1
0
0
1
0
Ja 0
21
Ja 9
Se 0
1
0
N 9
-2
-2
-2
-1
-1
-2
-2
-2
-2
2
-2
l-
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Ju
Ju
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M
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• Rapid economic development, rising middle class, increasing consumer spending power
M
N
Source: MCP, S&P Capital IQ, Bloomberg
© Mobius Capital Partners LLP 2021 *In USD terms, as of 30.07.2021 8
8EM Case Study: ZillTek Technology Corp Country
Taiwan
Weight
0.5%
Market Cap
$550m
Company Overview
Zilltek is a Taiwan-based analog and mixed signals IC design house. Its product offering 430
includes analog and digital MEMS microphones, digital temperature and pressure sensors,
audio amplifiers, and touch-screen controllers. These are used in PCs, wearable devices, and 410
TV applications. MCP starts
investing
Investment Rationale 390
• Market leader in the Notebook digital microphone segment, with market share (currently
~40%) expected to reach 50% by the end of 2021 370
Share Price (USD)
• High growth market: $7bn market expected to grow to over $11bn by 2025 350
• Highest product specifications in the whole industry -> solid customer base in the
automotive, smart home and wearables segment 330
• Leader in high signal-to-noise ratio for the headsets -> demand to increase as active noise 310 Engagement letter sent
cancellation and true wireless stereo become standard (i) IR materials & English annual report
(ii) Improving disclosure
290 (iii) Conduct earnings calls
Emerging Markets Themes:
• High value-added manufacturing: Benefitting from 5G roll-out, AI, and digitalisation
270
• Semiconductor supply chain: Largely located in EM (mainly Asia)
250
• Rising living standards and growing middle class to create rising demand for end products May-21 June-21 July-21
Source: MCP, S&P Capital IQ, Bloomberg
© Mobius Capital Partners LLP 2021 *In USD terms, as of 30.07.2021 9
9MEMF: Sector Analysis As of 31 July 2021
Mobius Emerging Markets Fund MSCI Frontier Markets Index
Health Industrials
Information Care 6% 8%
Technology
35% Materials
9%
Materials
8%
Real Estate
11%
Health Care Financials Others* 2%
9% 37%
Not Classified
18%
Communication
Consumer Services
Staples 13%
6%
Consumer Others* Consumer
Discretionary 8% Staples
16% Energy 9%
5%
*Others: Industrials (4.05%), Communication Services (4.01%) **Others: Utilities (1.67%), Consumer (0.26%)
Source: Bloomberg, Mobius Capital Partners LLP
© Mobius Capital Partners LLP 2021
10MEMF: Country Analysis As of 31 July 2021
Mobius Emerging Markets Fund MSCI Frontier Markets Index
Brazil Bahrain
9% Others** 7%
18% Iceland
China 9%
10%
Others*
35% Kenya
7%
Hong Kong
5%
Kazakhstan
7%
Vietnam
29%
Morocco
India
11%
22%
Taiwan
14%
Nigeria
Turkey 5%
5% Romania
7%
*Others: South Korea (3.46%), South Africa (3.25%), Kenya (3.12%), Vietnam **Others: Slovenia (4.51%), Oman (2.60%), Mauritius (2.06%), Bangladesh (1.92%), Croatia
(2.96%), Malaysia (1.25%), Russia (0.88%), Cash (17.65%) (1.49%), Jordan (1.42%), Sri Lanka (0.82%), Lithuania (0.74%), Tunisia (0.74%), Senegal (0.72%),
Estonia (0.65%), Serbia (0.15%)
Source: Bloomberg, Mobius Capital Partners LLP
© Mobius Capital Partners LLP 2021
11MEMF: Portfolio Characteristics vs EM and FM As of 30 July 2021
Market Cap (USD bn) Profit Margin (%) Net Debt/EBITDA (%)
8 16 5
144bn
4
6 12
3
4 8 2
1
2 4
0
0 0 -1
ROE (%) ROA (%) Forward EV/EBITDA
10 16
20
8
16 12
6
12
8
4
8
4
4 2
0 0 0
Mobius Emerging Markets Fund MSCI Emerging Markets
MSCI EM Mid Cap MSCI Frontier
Source: Bloomberg
© Mobius Capital Partners LLP 2021 All figures are in USD and calculated as averages, apart from Market Caps which are
weighted averages 12
MEMF Portfolio data is based on available data for portfolio companiesMEMF Has Delivered A Higher Risk-Adjusted Return
Relative to the MSCI Frontier Markets Index
Portfolio Statistics Port Bench Port Bench Port Bench
(6 Months) (6 Months) (YTD) (YTD) Since Since Total Risk Active
Inception Inception
Total Return 23.8 16.4 28.6 16.8 60.4 35.4
Currency Risk (Std)
Maximum Return 2.8 1.5 2.8 1.5 4.4 2.5
Minimum Return -2.2 -1.4 -2.2 -2.0 -8.9 -11.9
Mean Excess Return (Annualized) 20.4 27.4 9.8 Style Risk (Std)
Portfolio Statistics Port Bench Port Bench Port Bench
(6 Months) (6 Months) (YTD) (YTD) Since Since Industry Risk (Std)
Inception Inception
Standard Deviation (Annualized) 15.0 8.2 15.1 9.0 17.7 12.7
Downside Risk (Annualized) 10.7 6.2 10.6 7.0 13.7 10.8 Country Risk (Std)
Skewness 0.0 -0.4 0.1 -0.8 -1.5 -5.9
VaR 95% (ex-post) -1.2 -0.8 -1.2 -0.8 -1.4 -1.0
Sharpe Ratio 3.7 4.4 3.7 3.5 1.1 0.9
Equity Risk (Std)
Item Factor Non- Equity Country Industry Style Risk Currency
Risk Factor Risk Risk Risk Risk
Risk Non-Factor Risk (Std)
Portfolio 13.7 6.8 12.0 11.4 2.5 4.0 3.1
Factor Risk (Std)
Benchmark 10.3 3.7 9.4 10.9 1.3 1.9 2.2
Active 9.3 7.6 8.9 6.3 3.0 3.5 2.7
0.0 5.0 10.0
Source: Bloomberg, Mobius Capital Partners LLP
© Mobius Capital Partners LLP 2021 *Port = Mobius Emerging Markets Fund
**Bench = MSCI Frontier Markets 13
***Since Inception = since 24/09/2018For more information please contact:
Anna von Hahn
Email: anna@mobiuscapitalpartners.com
Phone:+44 203 829 85 05
Mobile: +44 7852 882 770
www.mobiuscapitalpartners.com
© Mobius Capital Partners LLP 2021IMPORTANT NOTICE
This presentation does not constitute a prospectus or an offer in respect of any securities and is not intended to provide the basis for any decision in respect of the Fund. An
investment decision must be made solely on the basis of the prospectus to be issued by Mobius SICAV (the "Fund"). This presentation has been prepared solely to provide a basis
for potential investors to consider whether to pursue an acquisition of shares. No information in this document should be construed as providing financial, investment or other
professional advice. Recipients should consult their tax, legal, accounting or other advisors about the issues discussed herein.
No reliance may be placed, for any purposes whatsoever, on the information contained in this presentation or on its completeness and this presentation should not be considered
a recommendation by Mobius SICAV (the "Fund"), Mobius Capital Partners LLP ("Mobius") or UBS Fund Management (Luxembourg) S.A. ("UBS") or any of their respective
affiliates in relation to any subscription for securities of the Fund. No representation or warranty, express or implied, is given by or on behalf of the Fund, Mobius or UBS, or any
of their respective directors, partners, officers, employees, advisers or any other persons as to the accuracy, fairness or sufficiency of the information or opinions contained in this
presentation. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in such information or opinions.
This presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Fund's
intentions, beliefs or current expectations concerning, among other things, the Fund's results of operations, financial condition, prospects, strategies and the industry in which
the Fund will operate. By their nature, forward-looking statements involve risks and uncertainties. You are cautioned that forward-looking statements are not guarantees of
future performance and that the Fund's actual results of operations, financial condition and the development of the industry in which the Fund operates may differ materially
from those made in or suggested by the forward-looking statements contained in this presentation. Past performance is not a guide to future performance.
This presentation is being made on the basis that the recipients keep confidential any information contained herein or otherwise made available, whether orally or in writing, in
connection with the Fund. This presentation must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written
consent of Mobius. By accepting this presentation you will be taken to have represented, warranted and undertaken that: (i) you have read and agree to comply with the contents
of this notice; and (ii) you will treat and safeguard as strictly private and confidential all the information contained herein and take all reasonable steps to preserve such
confidentiality.
This presentation is directed only at (i) within the EU, "professional clients" or "eligible counterparties" within the meaning of MiFID II Directive (2014/65/EU); or (ii) outside
the EU, persons to whom it is lawful to make the presentation. Persons who fall outside category (i) above must check that they fall within category (ii); if they do not, they may
not attend this presentation. Any person who does not fall within categories (i) and (ii) above may not rely on or act upon the matters communicated at this presentation. Any
person falling outside categories (i) to (ii) who has received any document forming part of this presentation must return it immediately.
© Mobius Capital Partners LLP 2021 © Mobius Capital Partners LLP 2021IMPORTANT NOTICE The shares have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S under the Securities Act ) except to persons who are “qualified purchasers” (as defined in the Investment Company Act) and “accredited investors” (as defined in rule 501(a) under the Securities Act). In addition, the Fund has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”), and the recipient of this presentation will not be entitled to the benefits of that Act. This presentation does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, shares in any jurisdiction where such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Fund, Mobius or UBS. The offer and sale of shares has not been and will not be registered under the applicable securities laws of Australia, Canada or Japan. Subject to certain exemptions, the shares may not be offered to or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com) © Mobius Capital Partners LLP 2021 © Mobius Capital Partners LLP 2021
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