Bart Turtelboom is a veteran of emerging markets investment.
This breadth of experience means the former International Monetary Fund economist has watched economies such as China, Russia, Brazil, and South Africa both prosper and then periodically stumble.
Based in Guernsey, APQ has already invested around US$100mln and has a very decent institutional share register.
Its objective is very simple – pay a fully covered dividend yielding 6% while ensuring APQ’s book value grows by between 5%-10% each year.
The company invests globally – so that means Asia, Latin America, the former Soviet Union and Eastern Europe - and invests in equities, currencies, credit instruments and government bonds.
Occasionally it will take strategic stakes in businesses where it becomes a supportive shareholder in for a journey of three to five years. It might even take control of a company and insert its own management.
In other words APQ is anything but a passive investor.
Regionally, it is diversified. “That’s important in emerging markets,” says Turtelboom.
Its biggest exposures are Brazil, Russia and its experts like the financial services and natural resources sectors.
The latter, after being clobbered for a number of years, rebounded markedly in 2016 and APQ benefited from this.
If Turtelboom and his team have a firm idea of what they like and don’t like (and act accordingly) they aren’t traders looking to make a small turn on a series of investments.
They are holders for six to 18 month, depending on the outlook for the country or the particular investment.
The flexibility comes in their not tracking a particular index – so funds can be deployed and positions doubled up where sentiment and fundamentals are favourable.
In Brazil, the APQ team has spotted what it thinks is a fantastic opportunity in the form of the inflation-linked government bond.“It is one of the best risk-rewards in emerging markets today,” says Turtelboom. “It will deliver significant capital gains over the next two to three years.”
He added: “Our view on emerging markets in general is benign. It is one of the few asset classes when you look around the world that offers both value, income and the potential for capital growth.”
But what about volatility?
The world’s up and coming economies are prone to periodic crises.
Flexibility is the key and that point mentioned early about not being hemmed in by tracking a particular regional index, which requires arbitrary exposure and weightings towards certain countries and asset classes.
Turtelboom said: “That means we don’t have to be in Indonesia, we don’t need to be in Vietnam or Argentina if we don’t want to.
“We really target the investments we are making towards the twin objectives of meeting the cover of the dividend, which we are very comfortably doing, and book value growth.
He concluded: “What also mitigates volatility is our multi-asset class nature. We can really deploy the capital where we see the biggest risk-reward, rather than being forced into one position or the other.”