This “Anti-Cathie Wood” Fund Manager Has Amassed $92 Billion AUM In Just Under 7 Years

February 22, 2023   |   Tags:
This "Anti-Cathie Wood" Fund Manager Has Amassed $92 Billion AUM In Just Under 7 Years

Co-founder of GQG Partners, Rajiv Jain, is being dubbed the "anti Cathie Wood". He doesn't spout off on Twitter and he invests in boring, cash generative companies, instead of speculative technology names. 

His portfolio is laden with names in oil, tobacco and banking, Bloomberg wrote in a recent profile. But this strategy has been a success. Jain has built a $92 billion fund in less than 7 years since he started. Three of its four funds beat the benchmark in 2022, the report says. 

Jain's Goldman Sachs GQG Partners International Opportunities Fund has gained 10.8% per year since its inception in December 2016, utilizing his strategy of taking large positions in individual names. He calls himself a true “quality growth manager" while referring to his competition as “quote-unquote quality growth managers.” Bloomberg says that he thinks of them as "imposters". 

Jain doesn't mind taking larger swings at companies with impenetrable balance sheets. “We try to take less absolute risk. The businesses we own generate lot of free cash flow. So the risk of us losing on an absolute basis is a lot lower. But sometimes that means you have to take more relative risk,” he said.

He told Bloomberg: “These kinds of volatile years actually allow you to differentiate a little bit more. A lot of ‘quality growth’ managers basically blew up. We found out whether they really own quality.”

This year his international fund is up just 3.4% versus the benchmark's 7.8%, as 2023 started with a respite for speculative technology names that the market hasn't given back yet. “I’m not a happy camper these days,” he says. His strategy is to invest in 40 to 50 large caps in his international fund, compared to the thousands that are included in the benchmark. 

Two of his largest holdings are British American Tobacco and Philip Morris International. 

Jain started cutting his exposure to technology in late 2021, exemplifying one trait that he thinks sets himself apart from other managers: the ability to recognize mistakes and change course. “Investing is a game of survival because most people won’t survive in the long run. So that should be the mindset rather than trying to win all the time. It’s as much about avoiding losing rather than trying to win,” he told Bloomberg. 

Colleagues describe him as risk-adverse. Gregg Wolper, a senior analyst at Morningstar, said: “He is so much more cautious than other growth managers. He has a combination of confidence and yet some humility in understanding that he might be wrong about something,” he continued. 

Tyler Durden Wed, 02/22/2023 - 11:54