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Christine Phillpotts

lines on the record: 80
first: 2025-02-13
most recent: 2025-02-13
sittings or episodes: 1
sources: podcast

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“Absolutely. So we travel quite often. So, our team just to talk about our team structure, six of us have been working together, have moved from Alliance Bernstein to Ariel, and our team has been working together for over a decade, so no less than 12 years specifically. throughout that time even though we're based in New York, we understand the importance of visiting all the different countries we're actively invested in. And so to that point, for example, last year I spent in aggregate four weeks in China to really not only meet with the management teams of listed companies, but to meet with their competitors privately held and publicly held, to meet with local contacts, to meet with domestic investors, to meet with other key contacts and players where you can get more insight by having a face-to-face conversation oftentimes.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And it also helps determine where we lean into or out of in terms of where we place our focus. We want to make sure that we have an alignment of interest, particularly as minority shareholders. That alignment is not just relevant to the specific stocks in terms of the management teams and the equity holders or the majority shareholders of the companies we invest in. We also think about alignment at the country level. What is the government looking to achieve? How is that evolving? How is that changing? And are very simplistic criteria is to not get in the way. If there's a country where we think the economic direction is moving in the wrong direction and where there's not that alignment with what the government's looking to achieve, we don't need to be invested in that country. There's other places for us to fish.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That being said, and just to put that in context, country would contribute about 10 to 15 percent. That being said, neighborhood matters, particularly in emerging markets. And so we cannot disentangle top-down considerations from our bottoms-up analysis. Because as we determine what discount rate to discount the free cash flows of a specific company, we need to think about the risk premium of that country, how the sovereign yields are likely to unfold, what are the currency risks. As we think about the growth potential of a specific stock, we need to put that in the context of the growth potential of that country. And so these top-down considerations are ultimately really critical to consider as we look at specific individual stock opportunities. So like real estate, neighborhood matters.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So, we're a bottoms up investors at the end of the day. We're picking stocks. If you look at our sources of active risk, about 50 to 60 percent of that consistently is from idiosyncratic or stock specific drivers.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“matter what we label them exactly we do have a limit on what percentage of the portfolio could be in what's classified as frontier but ultimately we're looking across all of these markets i mean there's 50 plus countries in the emerging markets world that have listed equity markets so that's a big pool yeah To draw upon and ultimately we're looking for the 60 stocks that we think have the best upside potential, taking into account liquidity and other parameters of risk.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think for us, the way we think about it for our emerging market strategy is we have the ability to invest across emerging and frontier markets.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So I guess there's two parameters there. So, one is from the economic standpoint, if you look at economic characteristics and criteria.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. So, South Korea for the MSCI definition is emerging. Isn't that kind of argue it should be developed? I mean,”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Opportunities and markets in which we can get an edge through active management. And I would say the benefits of the inefficiencies in emerging markets are that much more magnified for frontier markets. There are review cycles in which countries get upgraded to emerging markets or downgraded to frontier markets depending on how some of those market characteristics evolve.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's a great question. A lot of times the lines can be blurred and countries could go from one to the other and back. So we use the MSCI. Benchmark definition. So they have specific criteria on differentiating between what's in the emerging markets benchmark and what's in the dedicated frontier benchmark. So parameters around, for example, liquidity, market mechanisms, and other criteria, depth of the markets that will determine what's emerging with frontier. But I think the broader sense that we focus on is really, again, around this notion of efficiency or lack thereof.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“He absolutely, so Sancha decided to leave Grassroots Business Fund really to be able to go back into the listed equity space and to join a larger investment platform. And so at the time that I was considering potential opportunities, I came across the team that I joined and the fact that they were interested in launching a frontier on small emerging markets equity fund, which really paired well with my experience in small and frontier funds. And so I joined in early 2013 and specifically joined initially to cover sub-Saharan African stocks and also to help launch this new fund, which was called the next 50 emerging markets equity strategy. And the idea was to have a fund that specifically focused on frontier and small emerging markets that were even less efficient. So one of the least efficient markets in an RI.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“What are your thoughts? That's absolutely the case. And the data proves it out. So, for example, if you look at the last 10 years of returns, the median active EM manager across styles, so value growth in core, has outperformed the benchmark or passive strategies over the last decade. That is not the case when you look at US large count.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“By doing research in areas that other people ignored. From a personal standpoint, my parents originally from Haiti. So I was born and raised in New York, but I'm first generation. And so there was a lot of conversations around the dinner table around why are poor countries poor, what could be done about it, talks about economic development and the intersection with political reform and just how that affects developing countries more broadly. And so that was also from a personal standpoint a really strong interest of mine that led me to want to pursue emerging markets.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“But hindsight, it's 2020. But what's interesting is to answer your question about the pivot to emerging markets, what really drew me was a couple of things. So one is the idea of being focused on less efficient part of the capital markets was very compelling. I tend to be the type of person that if everyone's going in, you know, route one, I want to go into route two, three, and four just to kind of not be with the herd and to see what else is happening that people may be overlooking. And with large cap tech stocks, if the CEOs caught a cold, there would be 20 sell side notes about the fact that the CEO caught a cold. It's very well covered markets. Whereas in emerging markets, in particular markets like Africa, they were just not really being talked about. And so it was very interested to look behind the hood, see what was happening, and be in an arena where I thought I could add more value and have more of an edge.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So basically, by the time I mean looking back, I left at the peak of the market. Obviously, I didn't perfectly time it. But when I was leaving. I remember my colleagues telling me, well, why are you going to business school? That's going to be a waste of time. I mean, the markets are doing”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so when I was at JP Morgan, I was covering U.S. tech stocks. I was a research associate on the buy side working with senior analyst looking at software.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“That just were not at all impacted by the global financial crisis. So to me, that was the definition of uncorrelated asset.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“What was interesting is particularly for the segment of the markets, the fund was focused on, which is really smaller mid-cap private equity and private credit, they were pretty unaffected by the global financial crisis because these are companies, and in some cases countries that were never really fully integrated into the global financial system. And so as the global financial markets were in a tailspin, they were actually very resilient. And so we had really attractive opportunities. For example, that was a time period where mobile banking and mobile payments was starting to emerge. So we had a couple investments in that arena. We had off-grid clean energy investments. We had really interesting agribusiness and agroprocessing companies, consumer product companies. So companies that really were targeting the local markets and customer bases and supply chains.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I had some experience in Africa that was able to leverage for this role. And so, to answer your question, I spent probably three to four months out of the year on the ground. So I was based in DC as a member of the management team, but I would go for a month at a time, really working with the entrepreneurs that we had invested in, looking at diligence, working with partners, kicking the tires, as you said, which really provided a great experience to understand emerging markets on the ground and allow the nuances, particularly for smaller and medium-sized companies.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“What's that like? Yeah, absolutely. So during my time there, I was probably employee number four or five. So I joined soon after the spin out to help really establish our investment processes as an independent entity, provide the game plan for where we're going to invest, and ultimately help recruit other investment professionals as we're building out the team. And ultimately, investigate deals and structure deals and invest in portfolio companies. So my original focus was Sub-Saharan Africa. I did spend a summer between JP Morgan and HBS in Kenya working with a microfinance organization.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“No, we were able to enter a pretty compelling time in terms of having fresh capital to deploy. And so that fund's focus is on businesses, small and medium-sized, privately held companies that not only have good growth prospects and could generate healthy financial returns, but that are also providing economic opportunities to the base of the economic pyramid. So providing affordable goods and services to customers, incorporating individuals and supply chains in productive manners. So it was an impact-oriented private equity private credit fund.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I graduated from HBS in summer of 2009 and I was fortunate enough to join the grassroots business fund, which had been a division of the International Finance Corporation and literally spun out first half of 2008. So what was really unique about that is one of the few funds that actually had a fresh pool of capital to deploy.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And so by the time I got back to Harvard in September of 08, right, I mean, obviously the Lehman collapse occurred and really just the bottom fell out. And we're all kind of looking at each other saying, well, on the one hand, I guess it's good that we're in school as opposed to, you know, being on the street and having just been laid off. But I vividly remember later that year, the dean of Harvard Business School indicating to us that comparing us to class that graduated during the Great Depression And his message was basically like they turned out just fine eventually over time. And we were like, okay, well, this puts it into perspective.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Was. I was. Yes. So that was very fascinating experience. So I participated in an MBA fellowship program at Morgan Stanley. So when I resigned from JP Morgan to pursue my MBA at Harvard, I applied to and got accepted into Morgan Stanley's MBA Fellowship within the investment bank. So that involved two years full tuition paid for business school as well as a summer internship within the investment bank. And so I'm an investor through and through, but I thought it was an interesting opportunity to look at the other side of the house and to join the sell side and kind of see how the other side operates, you know, from the inside. And so I decided to join the capital markets group. And specifically, I was part of the convertible debt group, which was interesting because I actually started my career at JP Morgan Asset Management in the high yield.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, so as an investor, we constantly need to be aware of our own human biases because we're humans. So we are prone to the risk of making irrational decisions as well. But it's also really interesting to think about how these biases at the market level really creates interesting opportunities, right? It's because of these biases that we have inefficiencies in the market that we can then exploit as active investors. So if the markets were perfectly rational, arguably there'd be no opportunities. So it's just interesting to think about, again, as an investor, how do you handicap your own biases? And we do that through several ways. For example, we use some quantitative tools and approaches to help offset those natural biases, but also thinking about at the market level as a whole, as we think about the aggregate market participants, how we can exploit some of those biases to generate all them.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's right. So I decided to become an economics major and a psychology minor. I always had this interest in just understanding how people think and what drives just people's reactions, emotions, behaviors. That was just always a side interest of mine. And in particular, as a psychology minor, I had an opportunity to work with a Columbia professor on an independent study, specifically focused on cognitive psychology. And I found that subsegment really interesting because we did studies on kind of decision-making, biases, human biases, like loss aversion, and other biases that impact otherwise what should be rational decisions and make them less than rational. And so doing that in college, that independent study really opened my mind of to what eventually I learned to be the behavioral economics and finance area, but I didn't even know what it was called or that that was an area.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a program that selects New York City high school students who are going to university in New York City. And it offers a four-year full tuition paid scholarship to college, as well as a paid internship full-time during the summer, part-time during the school year. Wow. So I came across that opportunity. I applied and was lucky enough to get it. And then I said, okay, now I need to figure out what finance is actually all about. And luckily, as I started my internship when I was 18, over the years, you know, throughout college, I learned more and more about the different areas of the bank and became really intrigued with investment management specifically. But if it was not for that program, I may not be in this industry.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't actually, but my kids are taking piano lessons, so I'm being inspired to kind of restart. So then I decided to explore other options. But finance was not one of them because I just had no exposure to finance whatsoever. And so the way I came across finance is when I was in high school, I was applying for scholarships for college and I came across the Thomas G. LeBreck Smart Start Scholarship Program that was run by Chase Bank.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Because it became clearer to me as I got older that to really make a living as a contra pianist, you need to be the top 1% in the world. And I was good, but not that good. And then that might not.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Quick answer is no. So I pretty much tripped into finance when I was in middle school and high school, I wanted to be a concert pianist. So actually, oh, really? Yeah, so I spent probably 90% of my time outside of school on the piano practicing and playing at concerts. Wow. And essentially decided to pivot from that original plan.”
2025-02-13 · Masters in Business · Christine Phillpotts on Investing in Emerging Markets · IDENTIFIED FROM THE TRANSCRIPT · source