Inside Active: Cusana’s Marshall-Lee on Founder-Led Companies

Robert Marshall-Lee, CIO of Cusana Capital, highlighted emerging markets' strong performance since 2017, primarily driven by currency appreciation, during a recent Bloomberg Intelligence podcast. He detailed an investment strategy focused on high-quality, founder-led compounders with structural growth, emphasizing the need to avoid value-destructive companies common in EM indexes and viewing tariffs as short-term market noise.

Analysis

Emerging markets are recording their strongest year since 2017, a performance primarily attributed to currency appreciation. According to insights from Robert Marshall-Lee, CIO of Cusana Capital, this environment warrants a selective investment approach. His firm's "sword and shield" framework focuses on identifying high-quality, founder-led companies with structural growth drivers, while simultaneously avoiding what he terms "value-destructive" companies. This strategy stems from the belief that broad emerging market indexes are populated with fundamentally weak businesses, making active management critical. Notably, the firm views existing tariffs as "short-term noise" rather than significant structural impediments, suggesting a continued focus on long-term company fundamentals over macroeconomic volatility.

Key Decisions for Investors

• Investors should evaluate their emerging market exposure, potentially shifting from passive index funds to active managers who screen for quality and founder-led attributes, given the view that indexes contain many 'weak' companies.
• Consider overweighting high-quality, founder-led companies with demonstrable structural growth, as this factor is highlighted as a key driver for outperformance in the current cycle.
• Treat market downturns caused by tariff announcements as potential buying opportunities, provided the thesis that they are 'short-term noise' aligns with your risk tolerance and long-term view.