Nick Robinson is an investment manager at Aberdeen Asset Management. His diary runs from December 13-19.
Monday My alarm goes off at 6.30am but it is easy to wake up with the light streaming through the windows by 6am. Not like London at this time of year. I walk down the main business road of Faria Lima in São Paulo and am struck by the amount of development going on. We make our weekly conference call with the team in London. We discuss the initial public offering of a chain of pharmacy stores. Not one for us this time but we make a note to see a more well-established competitor next time as the sector fundamentals seem attractive.
Tuesday A power cut at the office means no air conditioning or internet. By the afternoon things are back to normal and my colleagues and I visit to a small company called Alpargatas, which makes the Havaianas sandals. Business there seems to be good so it is odd that there are no sell-side analysts following them, and their valuation, at about 12 times this year’s earnings, suggests that they are well off the radar for most investors. Sadly corporate governance there is poor with no tag-along rights for preference shareholders. Until this changes, we are unlikely to invest in the company.
Wednesday First event of the day is my Portuguese lesson. After a year here I can just about hold a company meeting in Portuguese, though thankfully most company managements speak English pretty well. I have lunch with a friend who is a partner at a local investment management firm. With an increased debt load I am a bit worried about the business, and this private equity type approach is one we are less keen on and may lead to trouble should the economy turn. Perhaps we should be thinking about leaving the position soon so I send a quick email to my colleagues back in London. (article continues below)
Thursday Today is relatively quiet so I get on with writing research on a dental insurance company, Odontoprev. The stock has had quite a run this year, driven by a couple of smart deals with the local banks Bradesco and Banco do Brasil. Valuation is looking expensive so I recommend we start taking profits. In the evening I go for dinner with a mixture of expat and Brazilian friends.
Friday A blisteringly hot morning so I am relieved to get into the office with the air conditioning working well. I arrange an investment trip to Colombia for early 2011. I have been there before but there is a supermarket we are keen to invest in, and we have a few final unanswered questions that need answering. Unfortunately, the market is expensive at the moment so it is likely we will need to be patient to get exposure there, but at least if we do the work we will be able to act quickly if there is a sell-off. In the afternoon I go to a lunch with the chief financial officer of Ultrapar, a chemicals company we own.
Saturday Up by mid-morning, an hour’s jog along the beach road and then a few hours on the beach with Brazilian mates followed by a barbecue in the evening. The barbecue is a Brazilian ritual I am rapidly learning.
Sunday Up late and back to São Paulo where my fiancée and I stop by a new mall operated by a company we own, Iguatemi. Rumour has it that this mall is not performing as well as hoped since it has small footprint and has been built with more floors than most malls, meaning that customers spend a long time in lifts and on escalators rather than shopping. However, on arrival it seems as busy as any other and we stop by the Lojas Renner store inside, which is packed with shoppers from the growing middle class. A reassuring scene given Aberdeen funds own 15% of the company.