BROKERS’ NOTES: Buy Vinci Partners, sell Tesla

Drikus Combrinck, CEO: Capicraft   

BUY: Vinci Partners

At this Brazilian-based alternative asset manager’s  IPO on Nasdaq last year it raised $250m.  I like Brazil for various reasons: the country produces enough energy of its own and it’s a big agricultural exporter so, structurally, it is better placed in this new world of energy and agricultural shortages. It’s also far removed from Europe’s geopolitical chaos and is as neutral a big economy as you’re going to get.

I also like asset managers, because they’re not capital intensive once you’ve got a brand out there that the market recognises. Also, the listed environment is getting smaller, so more and more funds will find their home in private markets. This is where Vinci Partners  specialises. I think listed markets will do poorly over the next decade, with increased volatility and diminished returns. But  there’s no such volatility in the private market. You’re also not entering at sky-high valuations that have been propped up by low interest rates.

Last year was a tough one for Vinci Partners, as interest rates went from 2% to 13.75%. The company was  the first to hit hard at inflation, and it’s been coming down since, which hurt performance. But there will be a lot of performance fees around the corner if inflation and interest rates stabilise. Vinci Partners is planning on raising another 10bn real, and will be applying the cash from the IPO. There are a lot of of opportunities.

SELL: Tesla

I know that shorting Tesla is where shorting ambitions go to die. But I think it’s a sell if you own it. It’s seen as a tech share, not a motor company, even though it does compete with VW, GM and so forth. The reality is that the competition is really picking up and other companies are throwing a lot of money behind the electric vehicle challenge; Tesla will be hard pressed to hold onto its market share. I think it is going to struggle to do anything to justify these valuations.