On the record: Cracking the code in Russia

Have you previously considered making investments in Russia?
We have looked at investments in Russia before, but what we’re really doing is focusing on wherever we can find great growth global companies, wherever they are.

How did Kapersky come to your attention? GA doesn’t have people on the ground in Russia, correct?
That’s right, but we did a detailed study of the security software industry; there were some trends in terms of people doing more online shopping and social networking, putting their identities online. And there’s more and more criminal threats aimed at those activities and security companies that are defending people and businesses against the professional organisations of cyber-crime.

John Bernstein



We felt it was a big theme for many companies globally and thought Kapersky had the best technology. It is very international with the large majority of sales outside Russia including very fast growth in the US.  The company has a very deep research bench and has been able to attract some pretty brilliant mathematicians, computer scientists and cryptologists in Russia.

Of the BRIC countries, Russia is often flagged as a risky market for private investment due to high levels of corruption/bribery; was this a consideration for GA? Does the firm have a responsible investment policy or ESG framework in place that helps to avoid such risks?
GA only invests in what we consider to be well-managed, well-governed responsible companies on a global basis.  We will always do very detailed diligence to make sure we’re comfortable with companies we’re investing in.

Your process doesn’t differ in emerging markets?
Not really. When we’re doing investments in new countries, at one level the bar is higher because we are less familiar with some of the business practices, but obviously what we’re trying to do is find the very best companies, with the very best business practices. We will do whatever work we can to get comfortable.

Many BRIC countries have associated political or economic vulnerabilities – how does GA confront these risks both in the selection process and in ongoing portfolio management?
GA is a global growth investor. Naturally that means we are keen to invest in growing markets including the BRICs.  We have our own teams in India, China and Brazil. Every investment has a different set of risks and we do consider investments within a framework of economic and regulatory risk.

Have the BRICs taken centre stage or does the firm believe there are still growth opportunities in Europe, too?
Absolutely. Most people assume that you can’t find growth in Europe, but you absolutely can. It is definitely true there are macro-challenges, but within that we’re finding some really good growth companies. And some of those companies also have exposure to BRICs, or to other emerging markets or trends which are growing. We’ve invested in ecommerce markets with Privalia, for example, which is an online fashion retailer with spectacular growth in Spain and Italy