On the prowl for themes
Themes for Sarasin’s thematic investment are devised by a theme origination committee, headed by its chief economist Subitha Subramaniam who joined Sarasin from the World Bank.
Subramaniam is responsible for translating global macro trends into the thematic process. ” We basically try to identify long term trends that are taking place in the global economy..,” she says. “We look to a number of sources - academics, consultants , think tanks and even brokers. “A recent theme we launched was the idea of global convergence, the coming together of the emerging world and the developed world.”
The origination committee considers possible new themes. “One area we have been looking at is capitalising on the uncertainty in the world today. There is a general perception that risk events, whether they are weather related or politically related, appear to be more extreme. And there is a feeling that society’s tolerance of these events is actually growing less - there is a greater intolerance of risk events.”
Insights like these are made investible by identifying companies that stand to gain from these developments. “We believe that companies that try to insulate an economy from a risk event or try to re-build it after a risk event should in long term benefit with a one to three year upward momentum in the share price. So we’re looking at sectors like insurance and construction.
“Another idea we’ve been looking at is benefits of the long-term migration and immigration patterns across the world. One example of this would be in the US where there is growing integration of Latin Americans within society. So companies that cater for the specific needs of the Hispanic population in the US are likely to benefit.
“We are also looking at the emerging world where there has been a great deal of urban migration. Whether you look at China, India or Brazil there is bound to be a need for construction.”