Rajiv Jain, founder and key stock picker at GQG Partners, is seeing vindication after a challenging year where his decision to dump tech stocks caused his fund to underperform. GQG Partners is a US$170 billion fund manager that focuses on global equities. The firm listed on the ASX in 2021 and has since increased its funds under management by 80 percent.
Jain’s contrarian view stemmed from concerns that the economics of artificial intelligence didn’t justify the market valuations. While AI-related stocks surged, GQG’s fund lagged, leading to outflows and a sliding stock price. However, a recent shift in the market, with investors dumping technology stocks, suggests Jain’s perspective is gaining traction. He believes many AI-related companies won’t generate sufficient revenue to support their valuations, despite the ongoing disruption.
Unlike other fund managers such as Bill Ackman, who are increasing their exposure to big tech, Jain remains cautious. He avoids memory chip stocks and private asset managers with heavy software exposure, particularly those financing data centres. Instead, Jain favours regulated utility companies trading at lower earnings multiples and property and casualty insurance companies. He also sees value in beer companies, particularly in emerging markets.
Despite growing its funds, GQG’s stock price remains below its listing price. Jain remains focused on risk management, prioritising the preservation of capital over short-term market gains. He views the current bull market as nearing its end, shaped by the fallout of past market downturns and is content to wait for the AI narrative to fully play out, rather than betting on fleeting tech trends.
