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France’s Vincent Strauss on the Alibaba IPO and Why Warren Buffett Isn’t the Role Model He Once Was

Jocelyn Jovene, the editor of Morningstar.fr, interviewed Strauss on July 31. Answers have been edited for length and clarity.

Morningstar, 10/30/2014

This article originally appeared in the October/November 2014 issue of Morningstar magazine. To subscribe, please call 1-800-384-4000.  

Vincent Strauss is one of the mutual fund industry’s longest-tenured emerging-markets managers, having invested in developing countries for much of his 35-year career. He is currently the chief executive officer of Parisbased mutual fund company Comgest Group, where he helps run the Gold-rated Comgest Magellan and Comgest Growth Emerging Markets funds. He has a Ph.D. in economics from HEC Lausanne.

1. What would you be doing right now if you hadn’t become a fund manager?
I could not imagine doing another job. Investment is my job, my hobby, and my mistress. I managed to get my wife, my daughter, and my mistress under the same roof…quite an achievement!

2. You have a advanced degree in economics. Does the current generation of young people need such an advanced education?
I do not believe it is mandatory. To succeed in this industry, you need common sense, curiosity, and be hard-working. It may help to have a background in economics, especially at a time when central bankers get lost themselves.

3. To borrow from Warren Buffett, are you currently being greedy or fearful?
We are not that greedy these days. It would be difficult to tell investors that financial markets are dirt cheap. What is currently missing for a lot of companies is top-line growth.

4. Would a rise in U.S. interest rates affect your portfolio?
It should not impact our companies substantially because our companies are net cash or with a low level of debt. The impact may be global with outflows getting out of emerging markets.

5. Are you finding more opportunities in developed or emerging markets?
We tend to be contrarian. In 2009 and 2010, our recommendations were cautious regarding emerging. Today, we are more constructive on emerging-markets equities for valuation reasons and because developed companies desperately need top-line growth.

6. Which are the most promising emerging markets?
Economic growth comes from demographic growth plus gains in productivity. Looking forward, countries on a reform path will attract more attention, as the ideal macro scenario for emerging markets of the past decade does not exist any longer. If [Indian prime minister Narendra] Modi succeeds with his supply-side reforms, a number of companies will benefit.

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