The Driehaus Emerging Markets team focuses on investing in emerging markets securities of all capitalizations, through the Driehaus Emerging Markets Growth, Driehaus Emerging Markets Small Cap Growth, Driehaus Frontier Markets, and Driehaus Emerging Markets Multi-Asset strategies. The strategies provide investors with exposure to companies experiencing growth inflections in addition to positive earnings revisions and medium-term (price) momentum, two factors that are positively correlated to alpha generation. The team is led by portfolio managers Howard Schwab, Chad Cleaver and Richard Thies.
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The strategy seeks to outperform the MSCI Emerging Markets Index over full market cycles.
The strategy strategy aims to outperform MSCI Emerging Markets Small Cap Index.
The strategy seeks to outperform the MSCI Frontier Markets Index over full market cycles.
The strategy seeks to provide superior risk-adjusted returns and higher total return than the MSCI Emerging Markets Index over a full market cycle.
The team employs a growth-oriented investment philosophy focusing on identifying company-specific growth inflection points and exploiting associated marketplace inefficiencies. Our philosophy hinges on a belief that market expectations tend to be ‘anchored’ to historical information and that points of inflection therefore introduce dislocations between market expectations and fundamentals which generate significant alpha capture opportunities. The team combines fundamental, macro and behavioral analysis with a nimble/active investment approach to quickly identify inefficiencies and generate a portfolio which uniquely seeks to achieve superior aggregate growth rates as well as superior risk characteristics.
Global markets suffered rising volatility that triggered a sharp sell-off in the final quarter of 2018. Risk sentiment was dampened by several issues including: a slowdown in global growth, high corporate leverage in the US, the US Federal Reserve continuing to tighten and the trade war with China. The US government shutdown was an unwelcome, but fitting, finale to close out the year.
After handily outperforming EM over seven out of the last eight years, US equity markets succumbed to an intense selloff into year-end, leading EM to outperform the US on a relative basis for the quarter. As investor allocations to EM stand at multi-year lows, the relative case for EM equities continues to build, albeit amid a world that remains fraught with uncertainty and fragility.