The Driehaus Emerging Markets team focuses on investing in emerging markets securities of all capitalizations, through the Driehaus Emerging Markets Growth, Driehaus Emerging Markets Opportunities and Driehaus Emerging Markets Small Cap Equity 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 aims to outperform MSCI Emerging Markets Small Cap Index.
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.
“I think it's true everywhere, but data shows it's particularly true in emerging markets, which is that the persistence of risk is generally higher than the persistence of return.” – Howie Schwab
Global markets were volatile in the first quarter of 2022 as the world was confronted with multiple major risk events and headwinds. The S&P 500 registered its first quarterly decline since the initial outbreak of Covid-19 in early 2020, returning -4.60. Meanwhile, the Bloomberg US Aggregate bond index returned -5.9%, the largest decline since 1980. Emerging Markets (EM) underperformed most developed market equities during the first quarter. China declined for the third straight quarter, with the MSCI China Index returning -13.8% during the quarter.