Perspectives January Publication

Happy New Year and welcome to the eleventh edition of Perspectives.

By most measures, 2017 will be remembered as an extraordinary year for global risk assets as International equities recorded strong performance with record low volatility. The same cannot be said for our regional Middle East equities which ended a very volatile year with a slim gain.

Ironically, the performance of our flagship MENA equities fund (+19% after fees) is almost in line with the gross returns generated by the S&P 500 and the MSCI World. This demonstrates that an unconstrained strategy focusing on alpha opportunities instead of the direction of the reference benchmark can generate strong absolute returns even in “flattish” markets.

This publication is divided in two sections: in the first part, we focus on international markets by looking at what we consider as the 10 most relevant (and unexpected) stories in 2017. We then share our global investment convictions for 2018.

In the second part, we look at our regional MENA equities. Despite challenging market conditions, there were some true growth stories in 2017 – and most of them seem still valid for this year. In our 2018 outlook, we outline our bullish case for the region. While some key risks remain, the stabilization of oil prices should enable the GCCs economies to enter into a “sweet spot” with less budgetary austerity but further roll-out of structural reforms.

At a time where investment ideas become scarcer, we believe that our regional equity markets provide global asset allocators with a unique combination of beta and alpha opportunities.

We hope you will enjoy this issue.

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