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APQ Global confident about future prospects as markets recover after challenging 2018

On the back of last year’s sell-off, APQ sees good value in emerging markets, particularly in Turkey, Argentina and Brazil.
OVERVIEW: APQ The Big Picture
The emerging markets investment firm manages a portfolio of bonds, equities and currencies
  • Well-diversified portfolio 

  • Markets recovering after tough 2018

  • APQ eyes further private investments


What APQ Global does:

APQ Global PLC (LON:APQ) is an investment firm with interests across Asia, Latin America, Eastern Europe, the Middle East and Africa.

The company manages a portfolio of bonds, equities and currencies with a focus on emerging markets.

The bulk of the company’s emerging markets exposure is in financials, followed by energy and basic materials.

Inflection points:

  • Last year the company reduced its emerging market equity portfolio while keeping its two strategic positions in City of London Investment Group and Anglo Pacific Group. APQ added exposure to four Turkish banks, after a sharp sell-off in August, taking advantage of attractive valuations.
  • Most of the company’s overall exposure last year was in credit and government bonds, representing 47.6% of book value, followed by local currency bond exposure (31.9% of book value). EM equities accounted for 19.1% of book value.
  • APQ believes the medium-term outlook will be supportive for emerging market equities, but the near-term impact of trade wars, political and economic uncertainty in Italy and increased tensions in the Middle East and the Gulf will dampen market sentiment.
  • The firm believes its credit portfolio is well diversified geographically, with the largest positions concentrated in Turkey (17.4%), Argentina (14.8%) and Brazil (10.2%). In terms of sectors, credit exposure is largely in government, financials and corporations in the energy sector.
  • In December, the company invested around 1% of its book value in wholesale telecommunications operator BARTR Holdings, buying a 40% equity stake.

Blue Sky:

Chief executive Bart Turtelboom said 2018 was a challenging year but APQ weathered the storm quite well and took advantage of the uncertainty in the market to make its first private investments.

The group is looking to make more private investments like BARTR Holdings.

“We now see that real value is appearing in that space, they tend to be very expensive but across financial services, corporate services we see very interesting opportunities,” Turtelboom said.

He said the new year has started well with markets showing a more positive tone.

On the back of last year’s sell-off, Turtelboom said emerging markets offer “very good value”, particularly in Turkey, Argentina and Brazil.

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