First Mercantile's investment approach is deeply rooted in its members' fundamental understanding of the Russian value system as it is reflected in Russia's nascent securities markets. The group's professional experience in international investment banking, consulting, and securities trading adds a vital perspective when seeking and analyzing potential investment opportunities. Since realizing the value of Russian investments is not always a product of classical security analysis, First Mercantile's professionals use their extensive local know-how in striving to maximize return.
Our specific expertise lies in capitalizing on the unique opportunities found in the Russian market. When applied to fund management, our proficiency translates into an ability to optimize each step in the investment process: how to identify; how to buy; how to enhance the value of; and how to liquidate. To capitalize on this process, and to enhance the return on a portfolio of Russia's leading blue chip stocks, we allocate a portion of the portfolio to a specific segment of Russian stocks.
Russian equities can be generally broken down into three broad categories: Traded Equity, Private Equity, and Emerging Liquidity. Although the categories may sound familiar, Russian traded and private equity tend to remain in their respective categories and offer limited opportunities for active portfolio investment. However, the stocks in the Emerging Liquidity category can at times make investment portfolios shine.
Emerging Liquidity stocks are not liquid enough (not enough free float, low daily trading volume, etc.) to be followed by major international investment houses. These securities may include shares of companies going through consolidations, reorganizations, or other corporate actions which may not be as readily comprehensible to the investment community at large. These securities may include shares of tomorrow's Russian blue chips! We, at First Mercantile, use significant resources and in-depth knowledge of the local market to identify and invest in these opportunities.
First Mercantile seeks to identify and invest in Russia's future blue chips. The shares of these companies may not be liquid today but may have significant upside potential in the near future. To ensure results, our investment philosophy rests on our four pillars of active investment management:
- Enhance returns by balancing portfolio between core Russian assets and well-researched Emerging Liquidity investments.
- Maintain a manageable number of investments.
- Serve on Boards of Directors and work with companies to enhance transparency.
- Assist brokers in increasing liquidity of certain stocks.
By utilizing our local presence in Russia and actively managing investments, First Mercantile has been able to provide investors with a broad exposure to Russia's core blue chip stocks as well as the other exciting investment opportunities that the market has to offer.
Print Version