Ashmore Group: A Niche Bet on Emerging Markets
The UK-based asset manager pioneered the emerging markets niche at the time when such an investment style was widely considered untypical and risky. In 1998, Mark Coombs founded investment manager Ashmore as a new division of Australia and New Zealand Banking Group (ASX:ANZ), then led a buyout a year later and took it public in 2006. We think that the business model at Ashmore is at the intersection of two sweet spots - emerging markets and debt markets (nearly 85% of the company's AUM), both of which are less prone to market efficiency hypothesis and the prevalence of passive investment vehicles (and hence, the "race to zero"). By comparison, its major domestic peer Schroder PLC (LSE:SDR) has AUM of $572 billion and 6,000 employees, global investment manager BlackRock (NYSE:BLK) has $7,400 billion AUM and 15,000 employees, and money market specialist Federated Hermes (NYSE:FHI) has $575 billion AUM and 1,900 employees. Ashmore Group is the smallest in both measurements among the above select peer group, but it is one of the most efficient in terms of AUM per employee.