GING markets may be the most popular investment flavour of the past decade but Franklin Templeton’s charismatic and distinctive guru Mark Mobius can safely lay claim to having been one of the first to spot the opportunities these countries offered.
Countries like Hong Kong and Japan were deemed emerging markets when Mobius started looking at them more than 30 years ago and the rapid pace of development since then has surprised him: “Not in my wildest dreams did I think the globe would be what it is today.”
In 1987, when Mobius joined Templeton, there were just three emerging markets: Hong Kong, Singapore and the Philippines. Today, he is executive chairman of the Templeton Emerging Markets team, which has around 60 people based in 17 different countries across the world and manages £18.8bn in assets. Consequently, Mobius and his team – which he says is like a family – are always travelling to different countries. A self-confessed nomad, the 73-year-old spends more than 300 days on the road each year and reckons he has clocked up over 30m miles of flight time.
When we speak by telephone, he is back at base in Singapore for a few days. However, he had just returned from Turkey – where Templeton has had a presence for some time and which Mobius sees as a valuable investment opportunity – and was heading off to Malaysia and then China within days. With his team, he tries to conduct as many site visits as possible because he feels that being on the ground is the best way to get under the skin of a company and a country. While he can use the company’s private jet if he is pressed for time, he prefers to travel by commercial jet partly to get a more realistic feel but also for a spot of airport shopping.
Mobius’s time on the road is unlikely to be reduced; the emergence of frontier markets such as Kazakhstan, Nigeria and Kenya as an investment destination is putting new countries and companies on the map. Unsurprisingly for a seasoned emerging market investor, Mobius is not fazed by the challenges that these countries create. “There’s always a way into these countries; I love going into some of the more difficult ones,” he says. But that doesn’t mean it is easy. The lack of liquidity in some of these markets requires investors to be very patient and not put too much in at once. Mobius also admits that a lot of these countries are not used to just giving information so you have to get them to become more forthcoming.
He recalls an episode when he was first investing in Russia. He and a translator rang a company with a list of questions about the business. But the head of this company said: “Before you ask me any questions, I want to ask you one question: is the destruction of the Russian economy by you capitalists on schedule?” To which the translator replied: “It’s not on schedule, it’s ahead of schedule.”
Although the Asian financial crisis was tough for Mobius, he still commands a strong following in the investment world – he even has his own manga-style biography. He feels that emerging markets are in a strong economic position right now but rejects any notion that they are decoupling from the weaker West: “Decoupling does not happen in this day and age – what happens in the US will be felt in Nigeria so you have to be ready for anything.”
Plenty of emerging markets have been keeping their currencies cheap to remain competitive with each other, and China in particular. “It is a good thing that the Brazilians have called attention to this – it will lead to more cooperation between countries,” he says but adds that China has started to move towards revaluation.
“We are going to have the situation where the renminbi will become a world trade currency like the dollar is today. To get there, the Chinese will have to change policies and become more open,” he says.
If they are going to become a greater world power, they will have to project their currency power to the rest of the world – and then they’ll have all the problems that the US has now,” he adds with a laugh.
CV | MARK MOBIUS
Education: PhD in Economics and Political Science from MIT.
Lives: He grew up in New York but is now based in Singapore.
Family: Not married – “If I had been, I’d probably be divorced by now because of all the travelling I do.”
Interests: Besides travelling, Mobius likes listening to all sorts of music and going to concerts. He’s also into his fitness and still cycles and goes to the gym despite being in his seventies.
Books: “I’ve just finished Germania by Simon Winder, which was interesting because I’m part German.” Michael Lewis’ The Big Short and Dracula have also been recent reads.