World Travels in the Hunt for Emerging-Market Debt
(Bloomberg Opinion) -- Luis Maizel travels the world looking for bonds to buy for his firm, LM Capital Group. He is the co-founder and senior managing director at the firm, which manages over $4.2 billion in assets.
In our wide-ranging conversation for the Masters in Business podcast, Maizel describes how different he looks and sounds to the investment committees that allocate capital versus the typical fund manager; he has turned those differences into an advantage.
Maizel doesn’t rely only on the credit-rating companies or Wall Street research, preferring to do his own due diligence into the corporations selling bonds to the public. He describes the advantages of this boots-on-the-ground approach when buying emerging-market debt. As an example, he observed that in emerging markets, 80 percent of publicly traded companies are typically still controlled by the founding family, and many have been for decades or longer. His due diligence includes a deeper “social analysis” of the family. The key is understanding whether new capital is being used for a new company factory that will generate more revenue, or instead is to purchase a private jet for the executives’ use.
Next week, we speak with Ivy Zelman, co-founder and chief executive officer of& Zelman & Associates. She is a Hall of Fame Institutional Investor and equity research analyst covering real estate and housing-related industries. Zelman is best known for warning about the housing crash and financial crisis.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”
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