Who Is Rajiv Jain Of GQG Partners?

The person in news past two days is not Adani. It is the man who has shown faith in Adani. Rajiv Jain of GQG Partners, USA.

Who is Rajiv Jain?

Jain was born in 1968 and grew up in India. He moved to the US in 1990 for his MBA at the University of Miami. Before that, he had graduated in accounting from Panjab university and added a Masters on Finance from University from Ajmer.

In a previous media interview, he claimed that he had started investing in stocks, right from his high school days.

Career journey

He started his career with Swiss Bank Corp as an equity analyst. He found his first job by cold-calling hundreds of CIOs and fund managers - by searching for them through telephone directory of CFAs.

He moved along with one of his bosses, as a portfolio manager at Vontobel Asset Management in 1994. He started his role just a few weeks before the Mexican peso devaluation and banking crisis of Dec 1994. In his role, he also saw the Asian currency crisis of 1997-98.

In 1997, he assumed the role of the portfolio manager for the Emerging Markets strategy. He was a star performer. In 2002, he assumed wider investment roles - he was the portfolio manager on the Emerging Markets, International and Global Equities portfolios. He then grew to being their CIO and Head of Equities. The global financial crisis of 2007-8 was another crisis that he saw in his career. Between 2014 and 2016, he served as the company's co-CEO.

GQG Partners

In 2016, Jain founded GQG Partners and took up the role of its chairman and CIO. Based in Fort Lauderdale, Miami, GQG manages $92 billion in assets, in global, US and emerging markets equities funds.

His leadership style has anecdotes to talk of his differentiated hiring style. He did not want to recruit analysts who would copy his style or talk of his style. He wanted to recruit those who had a mind of their own. So when he wanted to recruit the first set of recruits for GQG, he reportedly advertised for it under a different individual name and did not use his or company name. His research team includes former investigative journalists, whose task is to challenge analysts backing particular stock ideas.

GQG manages over USD 92 billion. His investment style is different too. He invests in around 40 large cap stocks, compared to available benchmark of more than 2000 companies in the international fund universe. For example GQG’s US fund has exposure to only late-20s stocks, compared to 500+ in the S&P index. He is not a fan of tech stocks and new emerging entities. He does not hesitate having large exposure to traditional sectors with high cash flows. Since its inception in December 2016, the $26 billion Goldman Sachs GQG Partners International Opportunities Fund has gained 10.8% a year, more than double the benchmark’s 3.9% annual return.

Ofcourse not all his bets have paid off. His bullish view on Russia backfired. He had invested a sixth of GQG’s emerging-market fund’s money by early 2022. When Russia invaded Ukraine, GQG started withdrawing. But could not exit many of their positions, and lost over 20%.

Jain, who has a majority stake in GQG, invests most of his personal wealth in its funds. GQG went public in the Australian bourse in 2021 and raised $893 million in what was the country’s largest IPO that year. Jain had committed to investing 95% of the IPO proceeds into the company and to stay invested for seven years.

In India, GQG’s portfolio includes ITC, HDFC, RIL, ICICI Bank, SBI, Sun Pharma, Infosys, and Bharti Airtel.

Adani deal

Explaining the rationale behind the Adani deal, Jain said, "We believe that the long-term growth prospects for these companies are substantial, and we are pleased to be investing in companies that will help advance India’s economy and energy infrastructure, including their energy transition over the long-run."

As per the press release, GQG Partners invested ₹5,460 crore for 38,701,168 equity shares in Adani Enterprises and 8.86 crore equity shares for ₹5,282 crore in Adani Ports. It also purchased 2.84 crore equity shares for ₹1,898 crore in Adani Total Gas, and 5.56 crore equity shares for ₹2,806 crore in Adani Green Energy.

According to Jain, GQG had been looking at Adani stocks for the last five years, but the “valuation was in no man’s territory”.

Why is this surprising ?

GQG’s current India exposure has stocks that are known for high dividend yield, lower valuations. It’s India exposure is over of its total portfolio. With its overall portfolio having a PE of around 7X, it’s investments into the Adani stocks seem surprising considering their PE trading multiples of Enterprises at 88X, Transmission at 72X, Ports at 26X, Green at 144X. After all, this investment amount has gone to the Promoters who diluted their stake and not the company !

The market also questions if any of these investments are not the opaque investments of related or connected parties through the concept of “managed accounts”.

Is he the astute investor who bets during a crisis and bides his investment horizon ? Has the crises he has seen in his career shaped him for this ride ? Time will tell.