Charles Henri Hirsch is one of the few investors capable of generating impressive returns over time. From 2000 through to 2020, he’s achieved an average return of 23% per year with Equinox. In this article, he identifies some key trends that should allow him to continue to perform well over the next decade.
“Russia is a riddle, wrapped in a mystery inside an enigma.” Churchill’s words are undoubtedly still shared by many investors. In reality, the economic growth of Russia and its financial dynamism are perfectly rational. Equinox is well-positioned to benefit from some of the new trends in the country and maintain its outstanding performance for the years to come.
Improvement in Corporate Governance
Until recently, Russian state-owned companies were not managed for the benefit of minority shareholders. Some practices are now starting to change. Several oligarchs are beginning to invest directly in the shares of state-controlled companies, rather than benefiting from ownership of the subcontractors billing these companies. This phenomenon has the effect of improving corporate governance, boosting share prices and protecting minority investors. That’s one of the reasons why Gazprom performed so well in 2019. On June 24th of that same year, a new dividend policy was introduced by the Board of Directors. From that point, the dividend distribution is to gradually attain 50% of net profit over the next three years. As a result, Gazprom share price soared from US$ 4.66 to US$ 8.25, an increase of 77% in one year. There is a good chance that other state-owned companies will now follow the same path.
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