Traveling with the Grandeur Peak Team: Insights from a Recent Trip to Indonesia

Share Article

Grandeur Peak Global Advisors, a boutique managers focused on Global Small Cap investing, has a team of global analysts who are regularly traveling the world in search of great small and micro cap companies not yet on the radar of most investment firms.

"Indonesia is similar to Malaysia in that it has a young population—over 50% out of the 240 million people (4th largest populated country) are under 30. I like that dynamic, it’s good for consumption"

Grandeur Peak Global Advisors, a boutique managers focused on Global Small Cap investing, has a team of global analysts who are regularly traveling the world in search of great small and micro cap companies not yet on the radar of most investment firms.

Before packing their bags, the Grandeur Peak analysts are actively screening a universe of roughly 30,000 companies to find the ones that look the most interesting. As they visit a country they will typically spend a week and meet with the management teams of around 25 hand-selected companies.

Amy Hu Sunderland and Blake Walker recently traveled to Indonesia and found an interesting emerging economy and a number of companies with great potential. Here are a few excerpts from Amy’s big picture notes on Indonesia:

"Jakarta does not have a good transportation system, so it is super congested. You can just imagine how hard it is to build up a good distribution system. So much time is wasted and companies have to budget in the extra cost and time for delivery of goods. Also, delivery systems are not always reliable; like if a truck doesn’t get a full load, the driver might just wait for a few days for a full load before delivering his goods. The guy at KFC told us in some of the rural areas, they sometimes have to airlift 1 ton of chicken because the trucks won’t deliver and they can’t be out of chicken at KFC!

Indonesia is similar to Malaysia in that it has a young population—over 50% out of the 240 million people (4th largest populated country) are under 30. I like that dynamic, it’s good for consumption; it also reminds me of Thailand or maybe China 15 years ago. There are tons of motorcycles, the streets are dirty, there’s a lot of rubbish everywhere, and you have mix of rich and poor in the same area.

Overall I felt it was a very vibrant economy. People are generally excited and positive, and the economy has performed well through the crisis. Labor cost is cheap, but unlike India, there is a lack of talent for white-collar jobs. We had good Internet access – even in the rural areas; 3G works, people are connected. Though the country is pretty poor, it’s improving.

Unlike Malaysia, where Spencer and I saw tons of cranes everywhere, we saw minimal build out in Jakarta. The government does not want to tear down the old buildings or shacks, so with limited space in Jakarta it is hard to build out new infrastructure. They need a subway system to relieve the congestion, and apparently the government has a goal to build one by 2015… I’m skeptical."

Such macro insights shared by the analysts provide a useful back-drop, but the analysts’ primary focus is on the company specific analysis of each company visited. They write-up an analysis of each company, which is then shared and vetted by the entire Grandeur Peak research team as part of the portfolio management process in managing the two Grandeur Peak Funds: the Grandeur Peak Global Opportunities Fund and the Grandeur Peak International Opportunities Fund.

About Grandeur Peak Global Advisors
Grandeur Peak Global Advisors is comprised of a highly seasoned and collaborative research team taking a bottom-up approach to investing using disciplined global screening, rigorous company due diligence, and close attention to valuation to find what we believe to be the best investment opportunities around the world. Our bias is towards small and micro cap companies because we believe we can find faster growth among these firms, and often at better valuations due to the lack of analyst coverage. Grandeur Peak Global Advisors, LLC is an employee-owned investment adviser headquartered in Salt Lake City, Utah and registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

###

The objective of both the Grandeur Peak Global Opportunities Fund and the Grandeur Peak International Opportunities Fund is long-term growth of capital.

RISKS:
Mutual fund investing involves risks and loss of principal is possible. Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

Investing in foreign securities entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investments in emerging markets are subject to the same risks as other foreign securities and may be subject to greater risks than investments in foreign countries with more established economies and securities markets.

An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a prospectus, containing this and other information, visit http://www.grandeurpeakglobal.com or call 1-855-377-PEAK (7325). Please read it carefully before investing.

Grandeur Peak Funds are distributed by ALPS Distributors, Inc (“ADI”). Eric Huefner is a registered representative of ADI.

GPG000166 9/30/2013

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Eric Huefner, President
Visit website