The Value Investor's Guide to African Stocks – Brad Virbitsky

Fantastic.

Now, let's talk about the work you do and the focus of your fund.

You've said in a previous conversation that Africa wasn't really the destination of your process, but it turned out to be a big part of the outcome.

Can you talk me through how a value investor in the US ends up with an emerging market portfolio with roughly 50% exposure to Africa?

So when I joined Equinox, I was number 10 out of 10 in seniority.

And so I got to research the stuff no one else wanted to look at.

So everyone was competing to take the Brazil trip or India or Southeast Asia.

And so I ended up with Canada, UK and eventually Africa.

And so I spent two or three years researching African businesses before we made our first investment there.

And that one went very badly.

And so it was another two years before our next one, which went better.

And that was Safaricom Kenya.

And we slowly started to invest more there.

We invested in MTN Ghana at the IPO.

We invested in Guaranteed Trust in Nigeria, but it wasn't until after the pandemic where we really increased our investments there, specifically in Ghana and Nigeria.

And that's because it was really just a generational buying opportunity in those markets.

Ghana had overspent during the pandemic, inflation had taken off, currency depreciated.

country ended up having to restructure its debt.

And in Nigeria, the country never really was able to adapt to the lower oil price environment, had many years of bad policies that made the situation worse.

And so there were really high quality businesses available at just incredibly low valuations.

And so we unfortunately had... already invested in a lot of these businesses before the crisis.

But thankfully, instead of selling, we invested more.

That's worked out for us so far.