We run a single investment strategy, and sustainability is an explicitly prominent consideration within the strategy. The strategy's starting point is Immersions research, or ethnographic studies. We aim to use the research to identify and refine a number of themes that we believe will face long-term growth, and can provide opportunities for sustainable investment.
Before every Immersions visit in a country we try to understand a range of commonly-held beliefs about that country. When we are on the ground we try to either prove them or debunk them. Debunking myths that apply to EMs allows us to identify investable themes that are not fully priced in. There are 7 themes in the portfolio that aim to solve social and/or environmental problems faced by consumers in EMs and which will have a positive impact in their lives:
There are 5 billion people at the bottom of the social pyramid. Some of them are the most driven and aspirational consumers, who despite having a higher rate of income growth than their middle-class counterparts, remain largely underserved. Companies that produce great value-for-money products, that can capture these demanding consumers at the bottom of the pyramid, can disrupt the whole pyramid above them.
These are among the most driven consumers who are willing to uproot themselves, striving for a better future for themselves and for their families.
Values have predictive and explanatory potential at both the individual and societal levels, as they influence the speed and direction of social change. When values shift, consumption patterns change, creating investment opportunities.
Patriarchal societies are fading in EMs. Electrification is driving a quiet revolution, where women are moving to the centre of the family. They still take care of the family, but also earn an income which allows for upgrading of the family living standards. Women think more long-term and focus on education, savings, and insurance.
When we started Immersions six years ago, youth was segmented by social class. Knowledge and trend-sharing through smartphones and social media are now making the process more inclusive, and are turning youth into a homogeneous group
Although life is our most precious commodity, many view longer life spans as a key demographic headwind. In contrast, we believe that longevity is a tailwind as countries capture the economic payback to societies from extending the productive life of individuals. This is particularly true in EMs where limited social safety nets push people to extend their healthy productive lives.
Health & Wellness
Health trends are accelerating in EM as health is viewed as a symbol of progress and an enabler of achievement – the need to stay healthy to cope with a highly competitive environment.