Approach
In the markets where we choose to invest, there is a disparity between perceived risk and actual risk. The disparity, which we term the “Perceived Risk Discount” grants us a significant margin of safety for the pricing of assets in the form of a discount to actual value, as well as a powerful advantage in setting terms for investment. Our unique investment approach requires that Scimitar operators spend a minimum of one year “on the ground” in countries under consideration for investment. We do not view emerging markets as a monolithic whole, in contrast to other investment firms, but instead as individual investment markets that require detailed, rational, and control-focused mapping.
Our operators straddle two worlds. They are graduates of top Western MBA programs, and were trained in blue-chip Western financial institutions. At the same time each operator speaks the language and is an expert in the economic, social, political, and religious aspects of his assigned country. Countries are selected for potential investment only after an exhaustive macro-economic analysis, followed by at least 12 months of market development. During market development, operators establish relationships with business leaders, law firms, accounting firms, government officials, and other people of interest in the country to test our investment hypotheses. We identify investment opportunities once the thesis has been validated. Scimitar then analyzes all possible risk factors and creates a program to monitor and mitigate these risks using proprietary political, financial, and legal safeguards.
It is this on-the-ground, conservative, and methodical approach that makes Scimitar a sound choice when seeking to benefit from the high returns and diversification offered by emerging markets.
