Ethos Investment Management

This week I was doing investor meetings in the amazing country of Kenya. Kenya is a $375B economy, the 5th largest in Africa and the 59th largest in the world. In terms of African economies, Kenya has a vibrant young workforce, is growing Real GDP 5-7%/yr, has competitive advantages in technology skills, English language ability, and has many vibrant and growing businesses. A couple of takeaways from the visit: - Kenya's key competitive advantage is it's people. They are educated, hard working, have good software, IT, medical and English skills, while at the same time are great at adapting business models to Africa's unique needs. Whereas other African countries rely on oil or commodity revenues, Kenya relies on it's people and service led economy. - China and India's investment in the country is apparent. The Chinese have invested heavily in the past decade, building the toll roads, ChinaMart a popular supermarket selling Chinese equipment and goods, and Indian families owning many of the largest industries in the country including cement, paints and consumer brands. - Kenya is off most investors radar screen right now. As a result, the country is priced very cheaply (MSCI Kenya trading at 4x P/E!) considering the growth and the quality of many companies. There are risks of course in Kenya, from currency devaluation, political protests, high unemployment and vulnerability to agricultural sector, but governance and growth in Kenya ranks above average overall. One example of a great Kenyan business is Safaricom PLC (me pictured this week with their management team). Safaricom is the telecommunications leader in Kenya with dominant market share (75%). They also own probably the most successful mobile payments platform of all time, M-Pesa. Reportedly, 91% transactions in the whole country of Kenya go through M-Pesa! CEO Peter Ndegwa and the mgmt team is innovative, constantly adding new value added products to the M-Pesa ecosystem, and giving back to local communities through their ESG efforts. Over the past 10 years, Safaricom has tripled EBITDA from K57B to K167B, and shows no signs of slowing down, all the while generating a 30%+ ROE. And now trading at only 8x adjusted P/E. I'm rooting for Kenya and it's people in the decades to come! Ethos Investment Management

It’s fun to see one of our new associates hitting the road for company visits in S?o Paulo.

Ethos is excited to announce the launch of our 2nd fund, the Ethos Pathway EM Frontier Fund. Our founder, James Fletcher, CFA, shares why we believe this is a unique product in the market today and its potential to redefine social impact in investing.