Unfortunately I had a conflict and missed it but would be interested in impressions and thoughts people were left with. I'm especially interested in any discussion about the partnership with Rondure, their move to a soft close for Emerging Markets Opportunities (GPEIX/GPEOX) including the shift to somewhat higher market caps and at what point they expect they'll need to hard close again. I'm almost certain they didn't say anything about plans for new funds but if they did I'd love to hear about that too.
Thanks for any and all assistance!
Comments
GPEOX: There has been very little change in the day-to-day management of the fund. Zach Larkin was a guardian PM of the fund for the past year. Because GP wants to take the product up cap over time, Zach has been replaced by Randy Pearce of the Stalwart Funds. Stuart Rigby, who has worked on EM for the past year, has also been added as a PM, and this change is a natural progression for him. GP has no plans to offer a Stalwart EM product. They did not mention closing the fund again.
Additionally, the hard to a soft close is not a big change. The fund becomes easier to manage if the cap size is higher. It has been tough in micro cap areas and in certain countries because of liquidity issues when the fund wants to reposition. This has hurt them in some markets, they say. The SEC is addressing this liquidity issue and is expected to have guidelines by year end. GP is looking at how this issue may affect them, but until the SEC gives specifics, GP is wait-and-see.
GP has also done well, they add, in the SMID areas of EM. They are "not losing any juice" in the portfolio by making this change, are very committed to micro cap EM but wish to be less weighted in certain "low liquidity countries."
What may be of interest other than the above:
Zach Larkin has been running a frontier paper portfolio for GP and has spearheaded a number of visits to frontier countries. Given how beaten down stock prices and currencies have been in these markets, GP felt that having a frontier product would be better run under the Rondure umbrella given the track record and experience that Laura Geritz brings. So Larkin was moved to Rondure for that purpose. GP and Rondure are fully integrated: they communicate daily, have the same emails, share meetings, research, travel with them -- all of this making GP and Rondure better investors.
This is a summary of what GP said. (None of it is my opinion.)
I've asked Eric Hueffner when the call might be available again at GP, if it is, but haven't heard from him. If I do, I'll post it for our readers.
I hope this helps you in the meantime. Best!
Derf
@Ben, your question is one I've had as well. I'm a shareholder of 3 of their funds, both directly with them and also through my brokerage account. In this case I received an email about the call but there was a call earlier this year, maybe 6 months ago (I can't remember exactly) and in that case I received nothing. I only found out about that call because of something mentioned here or maybe there was a comment in one of their quarterly commentaries. My assumption has been that there's a conscious judgment being made, like that the mid-year call was just institutional while this one was for everyone, but your experience makes that less clear.
I'm also on their mailing list, I think because of some questions I emailed them at some point and I receive multiple emails with the quarterly commentaries. In this case I only received one email, so I'm pretty sure that's not coming because of my brokerage account and I suspect its also not coming just from being on their email list. It could be, but just a guess, that I received the email as a result of the direct account I have with them. There's no question, however, that there's inconsistency and it's not totally clear how they're doing things regardless of whether that's intentional or not.
I like these guys a lot and they have more of my money than any other fund or fund company, but I liked them a lot better when they acted like they wanted to be a tiny niche player with tight control of AUM and essentially one fund sliced a handful of different ways. Each of the business decisions they've made over the last few years has been explained very logically and has made some sense in and of itself, but when you look at it all together I feel like some of the luster has been lost and their not really as altruistic as they held themselves out to be initially. At least in my case, its something I'll be keeping an eye on.
In all these cases this inefficiency is entirely in the area of communicating with shareholders, not in the area of researching companies and buying shares of stocks on behalf of shareholders. I still am invested in a few Vanguard funds despite bad experience with them mishandling an IRA transfer, and many months of no response to emails and phone calls. What a contrast to Grandeur Peak and Rondeur. Whenever I've spoken to someone at either of those funds the experience is of talking to a human being. The typical voice at the other end of the phone at Vanguard seems to be of a poorly trained automaton.
BTW I have invested directly (no brokerage) with both Grandeur Peak and Rondure, in the so called "institutional" shares of their funds.
I received an email about an investor call taking place, but I was at work at the time. I do have their "institutional" shares with GP in their first five funds, but I am not sure that is a prerequisite to receiving the email.
but that leads to the question of whether we should have any holding in frontier markets at all.
I had some further comments on frontier market funds in this earlier thread: https://mutualfundobserver.com/discuss/discussion/comment/93797/#Comment_93797