By ROBERT HARLEY 31/03/2006
An AIM listed, Bermuda registered investment company, investing across emerging market utility stocks with a bias towards Latin American and the Far East listed companies. Whilst this sector has traditionally offered lower beta qualities relative to broad emerging market indices; as a focused, single sector, emerging market portfolio, it still has to be viewed as a high risk investment proposition.
The investment case centers around the superior growth prospects and comparable valuations of emerging market utility stocks to G7 utilities. Emerging market infrastructure investment still has to increase massively from current levels if their services are to achieve a similar levels of coverage to developed world economies. This in turn will depend on local authorities offering a relatively benign regulatory environment to attract foreign capital to enable them to meet their infrastructure development targets. The focus will be on those countries which are perceived to be shareholder friendly and offer a more stable economic and legal framework.
The management team have substantial personal alignment in the company and will be taking performance related fees in the form of equity. The company is awarded an initial three star rating. The company is not ISAable.