The investment firm set up by former Vontobel star manager Rajiv Jain has more than doubled its assets to $62bn this year, making it one of the standout winners in the fund management sector from the coronavirus crisis.
GQG Partners, which was set up by India-born Mr Jain in 2016 and which manages funds focused on emerging markets, US and global equities, had net client inflows of $18.2bn in the first nine months of this year, the Florida-based firm told the Financial Times.
Those flows, plus investment gains in its funds, lifted assets from $30.7bn at the end of last year to $55.7bn at the end of September. Assets have since grown to $62.2bn this month.
While many sectors of the economy, such as travel and hospitality, have been devastated by the coronavirus pandemic this year, much of the fund management industry has prospered thanks to equity and bond markets that have been lifted by central bank and government stimulus.
Schroders, Standard Life Aberdeen and Man Group have all reported net inflows this year. Hedge funds, which had suffered nine consecutive quarters of net outflows, posted inflows in the third quarter, according to data group HFR.
GQG’s funds have performed strongly this year. Its emerging markets equity Ucits fund is up 24.2 per cent to the end of November, compared with a 10.2 per cent rise in the MSCI Emerging Markets index.
Tim Carver, GQG chief executive, said Mr Jain, who looks to buy high-quality companies and is prepared to pay higher multiples for stocks, was “highly adaptable” and refused to stick to one investment style. Many managers who focused on “value” — cheap stocks in often-unfashionable areas — have been caught out by the pandemic for much of this year, although they recovered some ground in November.
“There is a tyranny about style boxes that doesn’t benefit investors,” said Mr Carver. “A rigid focus on your style purity . . . makes it very difficult to innovate and adapt to markets.”
Mr Jain’s style was “different from saying ‘I’m a value investor and I only buy stocks from the bottom decile on a price/book ratio’”, Mr Carver added.
Mr Jain generated large gains during his time at Vontobel, managing about $50bn in assets at the firm at the peak, with much of that in emerging markets. However, he left after a disagreement with management about how big his fund could grow without hurting returns.
Despite GQG’s client inflows this year, the firm believes it can grow further, although it has started turning down some emerging markets mandates.
Mr Carver pointed to the growth in capacity in many of the areas GQG invests in, for instance the emergence of Chinese mega-cap companies. “There’s a lot of headroom ahead of us,” he said.