EM Fund Stock Picks & Country Commentaries (June 1, 2025)
Revival of Platinum/Palladium, Philippines trip report, Vietnam’s ambitious domestic reforms, South Africa's budget, Africa as a final frontier in global uncertainty, debunking EM myths, etc.
[The start-up/entrepreneurial focused] The Enthusiast podcast had this interesting episode with someone who was the CFO or CEO of two fairly successful Latam startups:
🎙️🌎 The Enthusiast: Founders and VCs beyond the Valley (The Enthusiast) 42:56 Minutes
On this episode Pat sits down with legendary operator and former MercadoLibre (NASDAQ: MELI) CFO, and of late CEO of Dlocal (NASDAQ: DLO), Pedro Arnt, to dive into his learnings of 20+ years of company building.
We discuss
Why he is bullish on emerging market's potential
His learnings around the early innings of MELI riding the wave of digitisation in commerce in the 2000s and why long term building beats short-term CAGR ambitions
The parallels he sees across verticals around digitisation in emerging markets from commerce to payments and how slower consumer adoption calls for more discipline and consistency but allows you to grow at +30% CAGR for many years
His take on balancing startup agility and processes and org. complexity of a big corporation
His new chapter with dLocal and why going from emerging market to emerging market makes all the sense
A couple of key points:
He made a broad generalization that entrepreneurs who try to be “method driven or read too many books on management” are not the ones who nail early stage start-up growth.
The real secret sauce in emerging markets is not to invent something new, but doing “incredibly complicated tropicalizing” of something that’s worked elsewhere.
If you are successful in Latam, you have the DNA to be successful in similar emerging markets.
This also brings me back to Europe and their lack of significant success in tech and related start-ups as summarized by this recent tweet which may or may not be true:
Nicola may just be doing a little trolling though…
In defense of European tech and start-ups, I have had (as job candidates) young Europeans working for or had worked for the main European star-up incubator - Berlin based Rocket Internet SE who:
…incubates, builds, develops operationally and strategically invests in internet and technology companies globally. It provides operational support to its companies and helps them scale internationally.
Rocket Internet SE is a good training ground for start-up work (some of their better known investments/divestures include Carmudi, Lazada, Daraz, Jumia, Zalora Group, etc.) and their young expats were typically paid Euro orUS$3-4k a month with basic expat benefits plus promises of big bonuses/equity, etc. to work in emerging and frontier markets before moving on to other businesses or start-ups.
The main complaint from these young expats was IF a funding round was missed or funding for a business ceased, the (often equally dedicated) locals in the EM or FM would get unceremoniously axed ala American corporate style (but in compliance with local labor laws…) while the good foreign expats would get redeployed to other businesses, markets, or to Berlin.
As of the start of June, more April fund updates (our continuously updated post containing all funds is here) along with new research has come available starting with a few more examples of funds pushing Europe, etc.:
🔬🇩🇪 German Bunds with renewed appeal (DWS) IN A NUTSHELL:
German government bonds have been highly nervous at times since the beginning of the year, as reflected in comparatively high yield volatility.
Their solidity, the steepness of the Bund curve compared to U.S. Treasuries and the generally higher yield level all argue in favour of Bunds in our opinion.
Uncertainty surrounding the fiscal policy of the new U.S. administration is also contributing to Bunds once again being seen as a potential safe haven.
🔬🇬🇧🚩 JH Explorer in Birmingham – Packing a punch (Janus Henderson Investors)
During a recent site visit in Birmingham, UK, Portfolio Manager Tal Lomnitzer discovers a world of sustainable biomaterial-based packaging.
Graphic Packaging Holding Co (NYSE: GPK) has strategically invested in new machinery, reducing production costs and enhancing its competitive edge, while also diversifying into non-food products, a strategy that could help to make its earnings more resilient.
🇺🇸 Graphic Packaging Holding Co (NYSE: GPK) - Package solutions for food, beverages & other daily consumer goods.
🔬🌐🚩 Quick View: Are NVIDIA investors missing the woods for the trees? (Janus Henderson Investors) - Portfolio Manager Richard Clode shares the main insights from NVIDIA’s latest quarterly earnings call, following the US tariffs announcements and H20 chip ban.
🎬🇨🇭 It’s a living thing – investing in biologics (Platinum Asset Management) 1:36 Minutes
Biologics are medications derived from living sources – like cells, plasma, blood and tissue - and they’re vitally important in the fight against diseases like Alzheimer’s, arthritis and some cancers.
Switzerland's Lonza Group AG (SWX: LONN / OTCMKTS: LZAGY / LAZGF) is a powerhouse player in this extraordinarily complex manufacturing industry with the skill and scale to deliver the products the pharmaceutical industry wants. Crucially, it can deliver them fast – helping their customers profit before their patents run down.
Our European Portfolio Manager, Adrian Cotiga, delves into this European innovator in the video above.
🔬🇪🇺🚩 This piece pushing European stocks has an excellent infographic listing various themes with stocks under those themes: European equities – Rising stars (Robeco) - With European stocks outperforming the US by a wide margin for the first time in years, investors have even more reason to question their regional allocation, degree of diversification, and opportunity set. Geopolitical shifts have set in motion developments that are likely to gain traction and could benefit European markets.