Q1 2019

Wealth & Finance International - Q1 2019 9 The Experts in EEMEA Asset Management Address: Regent House, Office 35, Bisazza Street, Sliema, SLM 1640, Malta Phone: +356 2033 0110 Fax: +356 27 480 008 Email: [email protected] Website: http://www.mori-capital.com/ Naturally, Aziz was eager to discuss the firm’s extraordinary lifetime performance, and its approach to securing significant results despite economic challenges: “With over 50% of the world’s remaining proven oil reserves and three quarters of the global gas resources, our investment region is the world’s energy hub. Thus, geopolitics play a vital role, but this also brings many opportunities to obtain mispriced assets. We take a medium to long term view in our investment decisions as geopolitics may produce surprises in the short run as we experienced in Russia and later in Turkey in 2018. Thus, here at Mori, on top of a bottom-up stock picking process, we utilise, within UCITS guidelines, index derivatives and foreign-exchange hedging to generate risk-adjusted returns.” Arguably, as Aziz moves on to explain, Mori Capital Management’s strength hinges on their ability to tap into little-utilised stocks- namely, those in Eastern Europe. “Driven by our proprietary quantitative and qualitative research, we try to select the highest quality, best-managed businesses in Eastern Europe and purchase their stocks at a discount to our intrinsic value estimates. Our business model is geared towards the long term, but we have a rigorous beta overlay and actively hedge against the region’s currencies in order to ensure that our investors are not exposed to excessive volatility. Finally, Aziz takes a moment to emphasise the region’s unique benefits. Where other asset managers are preoccupied by Western markets, Mori Capital Management harnesses their skills and experience to yield impressive returns. “It’s only as recently as 2012 that the US and a select number of other Western markets started to outperform Eastern Europe, with the effects of a number of rounds of quantitative easing boosting liquidity and ballooning the balance sheets of the major central banks. This did not happen in most of our countries.” “Moreover, many Eastern European countries have positive demographics with highly underpenetrated sectors in all parts of their economies. Eastern Europe is arguably the least leveraged region as a whole compared to many other areas of the world. Cash flow yields are impressive and dividend yields are superior to other regions that we know of. In view of the attractive and, in some cases, depressed valuations caused by global politics, we believe Eastern Europe offers a unique opportunity as an absolute or relative capital allocation”.