Investment philosophy

Focus – We believe in specialisation. It enables us to understand our markets better as well as identify investment opportunities that often are not evident. All we do is invest in what we call the East Capital Universe, a region which spans 30 countries and encompasses more than 400 million people. It includes the Baltics, Central and Eastern Europe, south-eastern Europe, Russia and neighbouring countries.

All our resources are spent researching and understanding these markets, companies and their potential regardless of whether or not they are included in an index.

Long term – It is important to understand the long term development trends in order to successfully generate higher returns. Our conviction is that transitional economies from the East Capital Universe will over a long period of time outperform developed economies in terms of economic development. It is also our conviction that within an emerging economy there will be sectors, and ultimately companies, that will benefit more, and for a longer period, from the convergence growth.

Local – We strongly believe seeing is believing. Since brokerage research in our region is limited – both in terms of coverage and quality – we know that first hand information enables us to identify investment opportunities unknown to mainstream investors and invest ahead of the curve. Since the foundation of our company in 1997, we have continuously been reminded of the importance of being on the ground in the markets we invest in. Our investment teams spend a significant portion of their time travelling, meeting with companies and their management. We consider that this is essential to interpret financial reports with an additional dimension of information and to be able to correctly assess a company’s ability to manage continuously changing situations in an emerging market.

At East Capital, local also means understanding the corporate and social culture in Eastern Europe. Therefore, many of our employees either come from or have extensive experience in the East Capital Universe. Last, but not least, speaking a local language is of utmost importance when researching companies as they rarely publish reports in English and management often only speak the local language. 

All in all, our investment philosophy provides us with unique information and intelligence to base our investment decisions on and to ensure active management.