Digitalisation, cloud computing, and AI are driving global data centre expansion. Big tech companies need more computing power for their AI services, increasing data centre infrastructure and environmental impact. In this investment letter, Comgest ESG Analyst Liudmila Strakondonskaya emphasises the need for effective governance and decision-making to balance AI growth with ESG considerations.

Is a stock at 12x earnings really a bargain? Not necessarily. In this thought-provoking piece, Comgest CIO and Portfolio Manager Franz Weis challenges the conventional wisdom around valuation metrics. He explains why long-term success comes from quality growth and earnings visibility — not chasing cheap-looking stocks. Discover how avoiding the “value trap” is central to Comgest’s Quality Growth investment philosophy.

Investors often focus on tangible assets like inventory and machinery, but human capital—employee knowledge, skills, and experience—is oftentimes undervalued. French leather goods company Hermès exemplifies how human capital is the quiet force behind long-term success.

What makes the US the world's strongest stock market? While many attribute it to leading technology, research facilities, and abundant natural resources, Comgest believes the true driver of US growth is labor productivity. Our US Equities strategy aims to leverage this efficiency by focusing on companies that achieve more with fewer resources.

Investor focus in Japan has recently shifted towards cyclical stocks like automotives, commodities, and financial services, driven by a weak yen and rising global interest rates. However, Comgest believes that companies involved in structural growth trends, such as digitalisation and ageing populations, are better positioned for consistent long-term returns.

In 2024, several companies in our Comgest Pan Europe Equity portfolio encountered challenges due to weak consumer spending in China. Despite this headwind, growth drivers, including healthcare, digitalisation and artificial intelligence provided significant tailwinds for our strategy. By focusing on resilient performance in the face of macroeconomic uncertainties, our investment approach aims to harness these underlying growth trends.