MIB: Advantages of Being a Foreign-born Bond Buyer

Luis Maizel travels the world looking for bonds to buy for his firm, LM Capital Group. He is the co-founder and senior managing director at the firm, which manages over 4.2 billion dollars in assets.

In our wide-ranging conversation for Masters in Business podcast, Maizel describes how different he looks and sounds to the investment committees who allocate capital versus the typical fund manager; he has turned those differences into an advantage.

Maizel also does not rely on the rating agencies or Wall Street research, preferring to do his own due diligence into the corporations who are offering bonds to the public. He describes the advantages of this “boots on the ground” approach when buying EM debt. As an example, he cited the data point that in emerging markets, 80 percent of publicly-traded companies are typically still owned by the founding family; many have been for decades or longer. His due diligence includes a deeper “social analysis” of the family. The key is understanding whether new capital is being used for a new company factory that will generate more revenue, or instead is to purchase a Gulfstream private jet for the executives’ pleasure.

His favorite books are here; a transcript of our conversation is available here.

You can stream/download the full conversation, including the podcast extras on  iTunesBloombergOvercastApple Podcasts, and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast, and Bloomberg.

Next week, we speak with Ivy Zelman, co-founder and Chief Executive Officer  of Zelman & Associates.  She is a “Hall of Fame Institutional Investor” and Equity Research Analyst covering real estate and housing-related industries. Zelman is best known for warning about the housing crash and great financial crisis in advance.

 

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