Barca Capital blends equity analysis with long-term demographic, political, and economic trends. In this way, Barca has staked its future on rising incomes and improved economic and political risk proﬁles throughout the world. While maintaining regional ﬂexibility, we focus on countries with potential for positive economic or political developments, whose risks we believe the market has overstated.
Developing countries faced political and economic challenges through the 1970s -1990s: high inﬂation, riots, massive urban migration, changes of government. Many have emerged, however, with better monetary policies, higher economic growth rates, and steadier governance. Companies that withstood these challenges emerged with strong competitive positions capable of very high returns on investment.
On a company level, we concentrate on businesses earning high returns on equity without taking excessive risks or debt. In particular, we prefer industries serving local demand such as ﬁnancial services, consumer goods, and even utilities. Using long-term demand projections, Barca seeks businesses with strong franchises providing recurring products or services in rapidly growing environment. We focus research efforts on good companies at attractive entry-point valuations that can grow and pay out cash ﬂows over long-term periods.
Barca Capital maintains a philosophy of engaging with the world beyond the balance sheet and income statement. We attempt to minimize risks by building a stream of local information beyond the boilerplate of brokerage reports. In addition to reading annual reports and meeting with management, we draw from a long, global, and growing list of local contacts in our favorite industries throughout the world. We personally travel to speak with former employees, distributors, and suppliers. We avoid the corridor of ofﬁce-car-hotel-airplane-ofﬁce and gain immense – and, we think, unique – insight and perspective.