Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
MENA equity markets underperformed in Q4 2025 with -4.3% returns versus +4.3% for emerging markets, driven by long dollar/oil exposure and under-representation in AI themes. For 2025, MENA returned 4.1% versus 30.6% for EM. The manager sees a healthy opportunity set developing for 2026 as valuations have reset lower following underperformance, creating opportunities to select high-quality stocks caught in broad corrections. Key structural drivers include ongoing socioeconomic reform agenda across the region, more pragmatic capital allocation in Saudi Arabia enhancing policy credibility, and continued focus on capital market development. Return dispersion remains pronounced with 34% performance gap between best and worst markets in 2025. The portfolio is overweight Qatar and Egypt for attractive valuations and growth visibility, while underweight Kuwait and UAE due to valuation concerns. The manager retains conviction in select Saudi opportunities across financial services, insurance and industrials despite modest underweight positioning.
MENA equity markets present attractive opportunities in 2026 following valuation reset from 2025 underperformance, with structural reform themes and country-specific drivers creating selective investment opportunities despite regional headwinds from dollar strength and oil weakness.
The manager sees a healthy opportunity set developing for 2026, driven by reset valuations following underperformance, ongoing socioeconomic reforms, more pragmatic capital allocation in Saudi Arabia, and continued return dispersion across MENA markets providing selective opportunities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 12 2026 | 2025 Q4 | - | emerging markets, energy, infrastructure, MENA, Reform, Regional, Valuations | - | MENA underperformed in 2025 due to dollar/oil headwinds and AI under-exposure, but reset valuations create attractive 2026 opportunities. Structural reform themes remain compelling while return dispersion provides selective country-level opportunities. Portfolio favors Qatar and Egypt over Kuwait and UAE, with selective Saudi exposure in financials and industrials. |
| Oct 29 2025 | 2025 Q3 | AMRT.JK, BCG.L, HDB.VN, HIK.L, IDHC.L, KGRB.KL | ASEAN, Banking, Diagnostics, Egypt, emerging markets, frontier markets, semiconductors, Vietnam | - | CC&L's emerging markets strategy navigated volatile Q3 2025 with strong performance from Egyptian diagnostics, Malaysian semiconductors, and Vietnamese banking offset by Indonesian retail and pharmaceutical headwinds. The manager actively reduced regional exposure amid policy uncertainty while identifying new opportunities in Middle East corrections and Egyptian inflation normalization, maintaining diversified positioning across growth companies with re-rating potential. |
| Aug 1 2025 | 2025 Q2 | - | Banking, geopolitics, MENA, oil, Regional, Valuations | - | MENA underperformed EM in Q2 due to weak oil environment and AI under-indexation. Manager leveraging regional dispersion by reducing stretched UAE exposure, building Saudi positions at attractive valuations, and eyeing Qatar opportunity. Oil expected to stay in mid-$60s sweet spot. Political risk premium at historic lows despite geopolitical tensions. |
| Apr 24 2025 | 2025 Q1 | - | Banking, infrastructure, Kuwait, MENA, Morocco, oil, Trade Policy, Valuations | - | MENA markets showed mixed Q1 performance with Kuwait leading on reform progress while oil price headwinds create challenges. Vergent maintains valuation-driven approach with superior portfolio fundamentals generating 18% ROE versus 13% index. Healthy cash position enables opportunistic deployment as volatility creates selective under-valuations in fundamentally sound companies. |
| Jan 28 2025 | 2024 Q4 | - | banks, MENA, Middle East, oil, Saudi Arabia, UAE, Valuations | - | MENA fund tactically navigated 2024 challenges by reducing Saudi exposure due to valuations, favoring UAE banks, then reversing as Saudi recalibrated. Maintains Morocco technology commitment and built Egyptian exposure post-devaluation. Despite political risks and oil headwinds, structural growth story remains intact with favorable 2025 outlook from stable oil and Trump presidency. |
| Nov 28 2024 | 2024 Q3 | 2280.SR, 4291.SR, 8030.SR | Banking, growth, MENA, oil, Saudi Arabia, Transformation, value, Vision 2030 | - | Saudi Arabia's Vision 2030 transformation is creating multi-year profit pool growth across key sectors despite oil dependence and consumer pressure challenges. After excessive valuations, markets are recalibrating to realistic earnings expectations. The strategy has repositioned toward attractive risk-reward opportunities, particularly Saudi banks where technical overhangs are clearing and earnings momentum continues building for next year. |
| Aug 7 2024 | 2024 Q2 | 1120.SR, 2222.SR, NBK.KW | Banking, Capital markets, healthcare, Kuwait, MENA, Morocco, Saudi Arabia |
2030.SR NBK.KW AKT.CA |
MENA capital markets are experiencing structural development with strong foreign investor demand, as evidenced by Saudi Aramco's oversubscribed $12bn secondary offering. Kuwait's political reforms will unlock decades of deferred infrastructure investment, creating a multi-year loan growth cycle. The strategy is positioned through exchange operator Saudi Tadawul Group and National Bank of Kuwait to benefit from these structural changes. |
| Jan 28 2024 | 2023 Q4 | - | banks, consumer, dividends, healthcare, MENA, Middle East, Saudi Arabia, UAE | - | MENA specialist reduces Saudi exposure on valuation concerns while favoring UAE banks yielding 6%+ and Moroccan companies positioned for manufacturing growth. Three consecutive years of regional outperformance versus emerging markets creates opportunities for specialized managers as foreign institutions remain underexposed despite strong fundamentals. |
| Nov 28 2023 | 2023 Q3 | - | banks, dispersion, MENA, oil, Performance, Saudi Arabia, UAE | - | MENA markets show unprecedented performance dispersion despite high oil prices, driven by diverging bank liquidity conditions, economic policies, and structural market evolution. Saudi faces tight liquidity while UAE enjoys abundance, creating sector-specific opportunities. The manager expects this trend to continue, making stock picking more rewarding in an increasingly deep and less cyclical market environment. |
| Jul 26 2023 | 2023 Q2 | 4001.SR, 4291.SR, QGTS.QA | growth, Gulf, MENA, mid cap, oil, Saudi Arabia, Valuations, Vision 2030 |
4001.SR 4291.SR QGTS.QA |
Vergent targets Saudi mid-cap opportunities driven by Vision 2030 reforms creating multi-year growth in education, healthcare, tourism and technology sectors. They balance growth expectations with attractive entry valuations, continuing to back companies like Al Othaim Markets while trimming overvalued positions. Elevated valuations expected to persist given transformative government agenda and financial capacity. |
| May 3 2023 | 2023 Q1 | 4291.SR, 7010.SR | Banking, Education, MENA, oil, rates, Telecom | ASTC | MENA strategy outperformed despite regional market headwinds from higher rates and lower oil prices. Strong performance driven by holdings in education and telecom sectors outside major index constituents. Strategy maintains bank underweight and reduced Egypt exposure while building positions in attractively valued dominant businesses with strong fundamentals and growth prospects. |
| Mar 7 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
OilThe region's long oil exposure contributed to meaningful underperformance relative to MSCI EM Index in 2025. The outlook for 2026 suggests a continuation of lower oil prices, which remains a headwind for MENA markets. |
Oil Energy Commodities |
AIThe region's under-representation in the AI theme resulted in meaningful underperformance relative to MSCI EM Index in 2025. The outlook for 2026 suggests sustained capital flows toward AI-linked assets, continuing to be a headwind for MENA markets. |
AI Technology | |
Financial ServicesThe region's socioeconomic reform agenda should support non-linear profit pool growth in financial services. The manager has reduced exposure to financials in Kuwait and UAE due to valuation considerations, but retains strong conviction in select opportunities across financial services in Saudi Arabia. |
Banks Financial Services | |
Infrastructure SpendingThe recalibration of ambitious giga-projects in Saudi Arabia signals a more pragmatic approach to capital spending and resource allocation. This shift enhances policy credibility and ensures sustainable public finances. The manager expects late-cycle opportunities in infrastructure to outperform in the UAE. |
Infrastructure Capital Spending | |
| 2025 Q3 |
SemiconductorsKGRB is a Malaysian engineer solutions provider with core competency in Ultra-High Purity gas and chemical delivery systems in the semiconductor industry. The company signed a framework agreement with a multinational semiconductor company in Dresden, Germany worth minimum $35 million and is bidding on more than $1.3 billion worth of work. |
Semiconductor UHP Chemical Delivery Contract Awards Europe |
DiagnosticsIDHC is a leading laboratory and diagnostics provider in Egypt and Jordan that resumed dividends reflecting management confidence in outlook. The company is scaling its testing-at-home business to approximately 20% of revenue and expanding through hospital partnerships. |
Laboratory Testing Home Testing Medical Egypt | |
Regional BanksHDB is a mid-sized private sector Vietnamese bank serving 23 million customers with strong competitive advantage in SME and consumer segments. The bank benefits from sector-leading returns with ROE of approximately 27% and has grown its loan book at twice the sector average. |
Vietnamese Banks SME Consumer Banking ROE Lending Growth | |
Convenience StoresAMRT is the leading mini-market retailer in Indonesia with over 20,000 stores operating in an effective duopoly with competitor Indomart. The company has a defensive business model with net cash balance sheet that can manage through periods of uncertainty. |
Mini-Market Indonesia Retail Duopoly Defensive | |
| 2025 Q2 |
OilManager expects oil to stay in mid-$60s for rest of year, which they consider a sweet spot for the region. OPEC+ strategy changes could add supply pressure. Recent giga-project scope reviews signal commonsense spending approach. |
Oil OPEC Energy Commodities Supply |
Trade PolicyTariffs remain area of tension as negotiations accelerate. Region's net import position with US mitigates direct negative impact, but indirect impact through lower oil prices could be significant. |
Tariffs Trade Policy Negotiations | |
| 2025 Q1 |
Infrastructure SpendingKuwait's reform program is taking shape with cabinet approval of the debt law that will unlock significant financing for infrastructure spending. The debt law paves the way for new mortgage law creating a $65 billion market. Kuwaiti banks are positioned to benefit from deploying excess capital into infrastructure lending, government bonds, and mortgages. |
Infrastructure Debt Law Kuwait Reform Financing |
MortgageKuwait's new mortgage law creates an estimated $65 billion market allowing banks to offer mortgages for the first time. This represents a significant new opportunity for Kuwaiti banks sitting on excess capital to deploy into attractive risk-adjusted mortgage assets. |
Mortgage Law Kuwait Banking Capital Deployment Real Estate | |
OilOil price outlook is challenged by weak global trade, cracks in the OPEC+ alliance, and indirect impacts from US trade policy volatility. A sustained low oil price in the low $60s on Brent would be negative for the region, though countercyclical buffers can absorb fiscal pressures. |
Oil Price OPEC Trade Policy Brent Fiscal | |
Trade PolicyOngoing escalation and volatility in US trade policy has muddied the investment outlook. While direct tariff impact on MENA is limited, indirect effects are significant, primarily captured through weak oil prices and slower global trade affecting the region. |
US Tariffs Global Trade Policy Volatility Indirect Impact Oil | |
| 2024 Q4 |
BanksManager favors UAE banks due to benign liquidity conditions and strong economic growth, with solid deposit franchises and strong lending opportunities. In Kuwait, they are building selective exposure primarily in banks and financial services. |
Banks UAE Kuwait Deposits Lending |
OilLower oil prices were one of the challenges MENA equities faced in 2024. The manager notes that stable oil prices under a Trump presidency would bode well for MENA equities going forward. |
Oil Energy Prices MENA Trump | |
| 2024 Q3 |
Saudi ArabiaThe Kingdom is in early stages of major societal and economic transformation under Vision 2030, driving multi-year growth in profit pools across financial services, healthcare, education, entertainment, tourism, real estate and technology. However, challenges include fiscal dependence on oil revenue, inflationary pressures in housing and transport, and consumer downtrading affecting purchasing power. |
Vision 2030 Economic transformation Diversification Oil dependence Consumer pressure |
GrowthThe strategy focuses on identifying growing profit pools early and investing in companies best positioned to capture market share. Recent market recalibration has created more attractive risk-reward opportunities after valuations moved well ahead of earnings expectations in prior years. |
Profit pools Market share Valuation discipline Risk-reward Earnings expectations | |
ValueValuation discipline remains the ultimate determinant of capital allocation despite belief in momentum as a return driver. The strategy has shifted toward areas with healthy combination of growth, attractive risk-reward and low investor positioning, particularly Saudi conventional banks where technical overhangs have suppressed price discovery. |
Valuation discipline Capital allocation Price discovery Technical overhangs Risk-reward | |
| 2024 Q2 |
Capital MarketsMENA region experiencing significant equity capital market activity with $12bn Saudi Aramco secondary offering and multiple IPOs. This strengthens the long-term thesis on capital market development in the region, with the region's share of global market cap expected to increase over time. |
IPOs Secondary Offerings Market Development Free Float Liquidity |
| 2023 Q4 |
DividendsUAE banks are signaling confidence by significantly upgrading dividend payout ratios for 2023 profits. The manager's UAE banks portfolio yields over 6% on average as of the letter date, which they view as attractive as the interest rate cycle begins to turn. |
Banks UAE Yield Payout Interest |
| 2023 Q3 |
BanksBanks are no longer the only conduit between fiscal surpluses and the non-oil economy, with governments channeling more surpluses to sovereign wealth funds. This is reducing deposit opportunities for banks, creating tight liquidity conditions in Saudi (96% LDR) versus abundant liquidity in UAE (75% LDR), resulting in divergent earnings and performance between the two countries' banking sectors. |
Liquidity Deposits Regional Banks |
| 2023 Q2 |
Vision 2030Saudi Arabia's Vision 2030 reforms are creating multi-year earnings growth opportunities most visible in mid-cap sectors like education, healthcare, tourism, transport, and technology. The political will to push through transformative socioeconomic agenda coupled with enormous financial capacity is unlocking significant growth opportunities for public market companies. |
Saudi Arabia Reform Growth Education Healthcare |
Mid CapSaudi mid-cap space has been responsible for significant proportion of market's year-to-date returns as large index sectors like banks and materials underperformed. The MSCI Saudi Midcap Index gained 9.9% in Q2, building on 7.7% gain in Q1, though valuations have meaningfully risen. |
Saudi Arabia Outperformance Valuations Small Caps | |
Discount RetailAbdullah Al Othaim Markets is capturing significant share of the ~$40 billion grocery market by doubling down on value-for-money proposition, taking advantage of weakening competition, shift in shopping behavior to value options, and population growth in central region. |
Grocers Value Market Share Trade Down | |
| 2023 Q1 |
OilLower oil prices present headwinds to earnings growth for energy sector constituents. OPEC+ remains committed to maintaining high oil prices to support government spending plans, which could benefit equity markets. |
Oil OPEC Energy Prices Government |
RatesHigher interest rates are pressuring banking sector profitability as cost of funds increases faster than yields on assets. This has contributed to underperformance in Gulf equity markets for two consecutive quarters. |
Interest Rates Banking Profitability Cost of Funds |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 26, 2023 | Fund Letters | Vergent | 4001.SR | Abdullah Al Othaim Markets | Consumer Staples | Food & Staples Retailing | Bull | Saudi Stock Exchange (Tadawul) | consumer staples, Discount Retailer, Equity, grocery, market share gains, Population growth, Saudi Arabia, value proposition | Login |
| Jul 26, 2023 | Fund Letters | Vergent | 4291.SR | National Company for Learning and Education | Consumer Discretionary | Diversified Consumer Services | Bear | Saudi Stock Exchange (Tadawul) | Education Services, Equity, exit strategy, K-12 Education, market cap, operating income, Saudi Arabia, valuation concerns | Login |
| Jul 26, 2023 | Fund Letters | Vergent | QGTS.QA | Qatar Gas Transport | Energy | Oil, Gas & Consumable Fuels | Bull | Qatar Stock Exchange | defensive, Energy Transportation, Equity, Fixed-Rate Contracts, Growth Optionality, LNG Shipping, Monopoly, North Field Expansion, Qatar | Login |
| May 3, 2023 | Fund Letters | Vergent | - | National Co. for Learning and Education | Consumer Discretionary | Education Services | Bull | Saudi Stock Exchange (Tadawul) | Consumer Discretionary, Education Services, Family Business, growth, K-12 Schools, Private education, Saudi Arabia | Login |
| May 3, 2023 | Fund Letters | Vergent | ASTC | Saudi Telecom Co. | Communication Services | Integrated Telecommunication Services | Bull | Saudi Stock Exchange (Tadawul) | Communication Services, Free Cash Flow, Government Receivables, market leader, Saudi Arabia, telecommunications, turnaround, Value | Login |
| Aug 7, 2024 | Fund Letters | Vergent | 2030.SR | Saudi Tadawul Group | Financials | Financial Exchanges & Data | Bull | Saudi Stock Exchange (Tadawul) | Capital markets, Financial infrastructure, IPO Activity, Market Development, MENA, Saudi Arabia, stock exchange | Login |
| Aug 7, 2024 | Fund Letters | Vergent | AKT.CA | Aktidal Group | Health Care | Health Care Facilities | Bull | Casablanca Stock Exchange | healthcare, Healthcare Reform, market leader, Morocco, Oncology, Private Hospitals, Universal Healthcare | Login |
| Aug 7, 2024 | Fund Letters | Vergent | NBK.KW | National Bank of Kuwait | Financials | Banks | Bull | Kuwait Stock Exchange (Boursa Kuwait) | banking, Corporate Banking, infrastructure investment, Kuwait, loan growth, market leader, Political Reform | Login |
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