Trends Watch: Concentrated Global Equity Investing

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.   

This week, Elana talks with Alpha Ba, Portfolio Manager, Pillow Investment Partner.  

What is your outlook for concentrated global equity investing? 

In his “American Dream” essay, Dr. Martin Luther King Jr. noted that the world has become a single neighborhood. The exponential advancements in communications have since turned this vision into reality, with the pace of innovation accelerating rapidly over the past few decades. This progress creates investment opportunities globally rather than being confined to a few countries. Consequently, home country bias can be costly. At Pillow, we believe that it is essential to deploy significant capital in our best ideas globally to maximize risk-adjusted returns. 

While maintaining a concentrated portfolio, it is crucial to focus on portfolio construction to ensure resilience across various market conditions.  

Where do you see the greatest opportunities and why? 

To answer this question accurately, I must note that the greatest opportunity can vary for each quadrant of our portfolio, which incorporates growth, core, defensive, and disruptive segments. Hence, each quadrant presents unique opportunities by focusing on high-quality compounders that can consistently generate excess returns over the long term. 

We believe it’s important to build conviction around the source and sustainability of the factors driving superior returns on equity, be they outstanding management teams, key competitive advantages, optimal capital allocation, or enduring operating efficiencies.  

What are the greatest challenges you face and why? 

As emerging managers, one of our primary challenges has been gathering assets. Investors understandably seek strong long-term track records. Demonstrating patience and discipline, ignoring daily market noise, and deploying sound risk management tools are crucial to capturing these long-term compounding opportunities. 

What keeps you up at night? 

Our raison d’être is to generate long-term outperformance for our clients. We devote all our waking hours to determining the best way to achieve this goal. We are grateful that we have successfully done so in recent years. 

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.