A benchmark-beating fund manager's advice: meet the owner
East Capital founder Peter Elam Hakansson joins the chorus of support for hands-on fund management in the era of passive investing
Moscow — In the 1990s, when Russian markets were opening up to brave few foreign investors, East Capital founder Peter Elam Hakansson had a foolproof way of rooting out the good companies from the bad: he visited their offices in winter to check if they could afford heating. In the early years of market capitalism in Russia it was almost impossible to find reliable information about companies from earnings reports, so those investors prepared to travel to run-down Siberian cities in sub-zero temperatures had an immediate advantage. The proof is in the 2,098% return Stockholm-based East Capital’s first Russian-focused stock fund made in the first decade of the millennium, about a third more than the average of peer funds tracked by Morningstar. The anecdote may seem redundant in an age where information can be obtained at the click of a mouse and money managers are increasingly being bettered by funds that passively track indexes. But Hakansson says investors struggling to demonstrat...
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