Sustainability & Stewardship

Sustainability & Stewardship

We set up DXB Partners with one goal: to create a Middle Eastern specialist investment & advisory firm with an authentic culture that drives us to fulfil our purpose of delivering superior outcomes for our clients.

We think of our culture as an independent thinking partnership based on radical transparency. That culture is visible in how we steward the capital & mandates entrusted to us by clients, the advice we give, the communications we deploy and the way we work internally with one another.

The job of investing, distributing, transforming, analysing & communicating is fraught with wins and losses. Consequently, we strive to recognise our weaknesses as well as celebrate our strengths. Some of the reasons we hear attract capital to our firm follow…      

Specialisation: we are a Middle Eastern specialist. Unlike many firms, this is our sole focus and is a significant contributor to the edge we offer. However, by also having a globally remote team with a significant European presence in Switzerland we can apply different lenses & avoid myopia.     

Tenure: Our founders have a rather long combined experience managing money & relationships in the Middle East & elsewhere, 42 years at last count! They are supported by team members who understand the idiosyncrasies of operating in our region. Seat time doesn’t guarantee better results but it does increase the odds by helping to eliminate much of the trial and error & wasted time often seen in rookie investment firms.  

Alignment with clients: we are a privately owned business structured as a partnership and do not have to justify short term financial performance to any stock market. 

Radical transparency: Business doesn’t always look pretty so we publish our results whatever the climate & we share our progress along the journey. This culminates in an invitation to all our clients to join our Advisory Board where we discuss in open forum how we did and what we could do better. This helps to steer and reinforce our partnership.

The Middle East: Investing, dealing & working in the Gulf requires a different approach to that deployed in centuries old, developed Markets. Informational inefficiencies abound, power structures have to be deciphered, and political noise often amplifies the effects of short-term capital flows. The very nature of the world’s fastest growing capital markets means they are not the finished article; this applies to the evolving demand, regulatory landscape, competitive environment they face, the style of management and board quality, as well as the way they consider the views of external stakeholders. The financial returns on offer can be substantial but patience, contrarianism and discipline are a prerequisite. 

 

Our Investment Beliefs

We believe that active management is the best way to reduce the risk of capital loss rather than simply following an index. Risks in our region are absolute rather than relative. We have developed an independent approach to assessing risks in four silos: Business, Financial, Governance, and Valuation.

In the midst of an ever-changing investment landscape across Emerging Markets, the aim of our research has remained the same: to identify factors that are likely to have a material impact on investments made on behalf our clients. This requires diligent in-depth research that looks beyond traditional categories of financial analysis, including many now labelled as ESG factors.

We prefer to use our own thinking and methodology but we will use third party inputs if they help us understand our companies better. We continuously look for ways of improving our understanding of all factors of analysis.

We hold a privileged position in capital markets of being able to interact and engage with senior management teams on improving company performance. There is no such thing as a perfect company but we believe that by encouraging management teams to take good capital allocation decisions and to treat shareholders and other stakeholders fairly, we can achieve long-term capital growth for our clients and encourage companies to have a positive impact in their respective jurisdictions.

Where we have expertise we will offer advice and share examples of our prior experience with other companies in Emerging Markets, and we view these engagements as a core part of allocating capital.  

We don’t invest with a specific moral agenda & as capitalists we are also pragmatists. However, we do want to ensure we play our role in maintaining healthy and functioning capital markets. We want to allocate capital to companies that create prosperity for stakeholders and do so without creating significant negative externalities that undermine those benefits. To that end, we will not invest in companies where our analysis uncovers the company profiting from flagrant human rights abuses; such practices are neither sustainable nor acceptable to us.

Should we become aware of any such potential issues after our initial investment we will investigate and potentially engage with the company involved, in an attempt to understand and influence their approach. If we are not convinced that management are willing to satisfactorily address any material issues then we will ultimately end our investment.

For more information on our Sustainability Investment Policy, which sets out our compliance with the Sustainable Finance Disclosure Regulation, please get in touch.