Another big fund manager is coming out swinging in favor of Moscow as the corporate governance climate in Russia continues to improve relative to other emerging markets.
Mattias Westman, head of Prosperity Capital, which has put about $4.4 billion to work in Moscow, recently told Reuters that the one thing he can be sure of is that Russian companies will be better run this time next year.
Going forward, he notes that even if the rest of the world piles into Moscow, these stocks will probably be cheap for awhile. Right now, the core Prosperity portfolio — up 38% year to date — is trading at a P/E of about 5, which is, he modestly notes, “lower than it has been for some time.”
Even the overhanging risk of another messy struggle between foreign shareholders and the oligarchs — not to mention the Kremlin — has its upside, in his opinion.
Despite nearly being forced out of TNK-BP back in 2008, BP ended up earning roughly a 212% return on its initial investment, while TELNY’s stake in Vimpelcom (VIP, quote) also seems to have paid its Norwegian partner back for its headaches.