In total, there are 49 investment professionals (portfolio managers, analysts, risk management professionals, and traders) fully dedicated to covering Latin American markets based in the USA, Mexico, Peru, Colombia, Argentina, Brazil, and Chile. Compass Group analysts contribute to bottom-up research as generalists (covering both equity and fixed income). The portfolio managers leverage the Firm's infrastructure and investment professionals in order to maximize access to local, country specific insight and capabilities that the Firm believes are integral to alpha generation.
Compass Group’s investment philosophy and process have been built and refined based on the knowledge and experience gained from 20+ years of investing in Latin American equity and fixed income markets. The model fully integrates U.S. and Latin American local intelligence to help identify and benefit from inefficiencies across the region’s complex markets.
Compass Group’s investment philosophy is aimed at generating alpha through active bottom-up selection, subject to top-down considerations. Bottom-up, high-touch, original fundamental analysis and disciplined research underpins high conviction positioning, seeking to profit from long-term top performing issuers. The investment team aims to meet regularly with issuers throughout the region and keep close contact with them across multiple levels to strengthen the analysis, all while working within the framework of legal and regulatory restrictions. Top-down views are used to frame the portfolios’ risk profiles, filter the investable universe, and enhance the portfolio monitoring process.
The Firm’s culture of discipline revolves around three pillars: investment case, investment process and risk management. Strategy investment cases serve as a guide for idea origination for all investment professionals. Portfolio managers’ skills are leveraged by designing strategy-specific Investment Processes, which are benchmark agnostic. The Firm’s concentrated portfolios tend to carry less risk than each of their relevant asset classes. Portfolio managers are accountable for portfolio construction, supported by constant risk management monitoring by an independent risk analysis team, the Firm’s Chief Investment Officer (CIO). Monthly risk management committees, which include other portfolio managers and partners, challenge positioning, review mandate execution, and assist with best practices.
Compass Group increasingly focuses on the integration of environmental, social and governance (“ESG”) issues across its portfolios. As stewards of clients’ financial capital, Compass Group has a stake in encouraging robust ESG practices within its invested companies. Compass Group’s fundamental bottom-up analyses have long considered ESG issues as a key input in the sustainability of an individual company’s investment case. Compass Group deploys a proprietary corporate governance rating across its priority coverage universe and expects to continue developing methodologies to assess environmental and social risk factors that may become material within the forecasting period. In accordance with this philosophy, Compass Group has implemented an approach to 1) screen and evaluate, 2) engage with issuers, 3) integrate actionable metrics into the investment process, and 4) customize clients’ ESG preferences.
The Firm believes that informational, analytical, and liquidity inefficiencies in Latin American capital markets will remain relevant in the future and that Compass, with its investment philosophy and unique infrastructure, is well positioned to capture excess returns on behalf of its investors.