Mark Mobius: Please tell me about your career to date.
Usman Ali: It’s been fun. After graduating from university, rather than following my peers into investment banking, accounting or management consultancy, I wanted to focus on something that tied together my studies, interests, and personal philosophy: ESG investing.
I joined Royal London Asset Management’s (RLAM) sustainable investment team and have been focused on the space ever since. I moved from RLAM to New York’s Caravel Management (now Greentech Capital Advisors), where I built a sustainable investment framework for one of the world’s first ESG integrated emerging and frontier market equity funds. Most recently, I’ve acted as a consultant for firms looking to expand their ESG capabilities, including a single-family office in London, East Capital in Stockholm, and Degroof Petercam Asset Management in Brussels.
It’s been incredibly valuable to sit on both sides of the table: as a client at a sophisticated family office, and on the direct equity investing side itself. Above all, I’ve loved witnessing the seismic shift within the industry as investors start to take ESG seriously and understand its material impact on valuations. Clients, funds, governments, countries, and individuals are all increasingly interested in ESG, and it’s been great to work alongside them to be a part of that change.
Mark Mobius: What attracted you to Mobius Capital Partners?
Usman Ali: There are a lot of reasons! Firstly, I am a strong believer in independent partnerships. As a small, highly entrepreneurial firm, our ownership structure frees us from institutional bureaucracy. We can focus solely on investment performance. Furthermore, the reputation of the founding partners is unrivalled within emerging and frontier markets investing. It is an enormous privilege to work alongside and learn from such a seasoned team, who bring with them decades of field experience.
However, what makes Mobius Capital Partners truly unique is the hands-on approach, rigorous due diligence and engagement processes, evidenced in our highly concentrated portfolio. In addition to us partnering with companies, there is a tremendous opportunity to engage with regulators and capital markets authorities to improve ESG standards in emerging and frontier markets, contributing to a real and lasting difference.
I’m very excited about our boots-on-the-ground approach and meeting companies throughout the world!
Mark Mobius: What is your interest in emerging and frontier markets?
Usman Ali: The scope for development in emerging markets presents an unprecedented opportunity for ‘leapfrogging’ developed markets. The lack of legacy infrastructure and sunk costs, combined with a wealth of technological innovation and labour, allows entire industries to not just catch up but improve on how we have done things in developed markets. Whether that’s in the context of tangible development (high-speed internet, public transport) or intangibles (corporate culture, governance, etc.), it’s such an exciting time to be investing in emerging and frontier markets. I also find that EM investing is always much more closely tied to macroeconomic and political affairs, which really broadens the scope and keeps things fresh and interesting.
I’m particularly looking forward to heading back to my family roots and generating investment ideas in Pakistan. I’ve been following the country’s development very closely, including its upgrade from a frontier market to an emerging market, and so it’ll be really fulfilling to be able to play a part in the country’s continuing development.
Mark Mobius: Where do you see the greatest opportunities when engaging with emerging and frontier market companies on ESG issues?
Usman Ali: Where do I start? There are so many opportunities for emerging and frontier market companies to flourish by tackling everything from governance standards to social sustainability. Improving capital allocation, aligning incentives of management and shareholders, or adjusting board composition – these are just a few examples of areas where many companies fall short of the standards expected in developed markets.
On the social side, there is a real opportunity to improve the quality of supply chains and products themselves. It is important companies are on the right side of forward-thinking regulation. Above all, however, disclosure is what needs to improve the most – transparency is critical!
Mark Mobius: What are your thoughts on the new government in Pakistan?
Usman Ali: I think the local population, as well as Pakistanis living abroad, are excited to see Imran Khan, a childhood hero for many, take up the highest office. However, the immediate challenges require speedy solutions. Negotiating with the IMF will be key.
For many years, companies in Pakistan have been able to thrive without the support of the government. With the right policies, this could be a game changer. With a forward PE of 8x and earnings growth of 16%, Pakistan’s equity market continues to be very attractive.
Mark Mobius: In another life, what would be your dream job?
Usman Ali: The diplomatic service. I suppose there are many similarities to what we are doing. The core tenet of our active ownership approach is commercial diplomacy. It’s tremendously rewarding to develop awareness and sensitivity to different cultures, learn how to persuade key stakeholders, partner with a range of companies, and to have the opportunity to gain real international experience. Otherwise… maybe a food critic – I’m a fan of Giles Coren!