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Itaú Latin America Equity Strategy

The strategy seeks competitive long-term risk-adjusted returns by investing in companies in Latin America exposed to secular growth themes with a bias towards quality.

Investment philosophy and objective

The investment objective is long-term outperformance versus the benchmark through investments in Latin American stocks. We combine a comprehensive bottom-up research process with a top-down overlay. Our investment objectives lead us to identify companies exposed to secular growth themes (or powerful cyclical drivers) and to seek stocks that are attractive on three main pillars: Dynamics, Valuation and Sentiment, or DVS. We have a quality and growth bias: we like companies with quality and reputable management and high levels of capital discipline.

Investment process

To aid us in our stock-selection process, we use a proprietary screening tool that ranks Latin American stocks according to the three pillars of our DVS investment process.

Fundamental dynamics

  • Rigorous analysis of cash flow and earnings trends
  • Focus on 1 and 3-year earnings and free-cash-flow growth rates above market averages
  • Focus on improving trends in return on invested capital and return on equity

DYNAMICS

In this stage we look to quantitatively verify the secular growth themes previously identified, or the cyclical drivers that could lead to material inflection points.

Valuation

  • Help identify attractive valuation relative to growth
  • Flexible valuation approach depending on sector and company specifics

VALUATION

In this stage of the process, we assess the stock’s valuation relative to its growth potential.

Market sentiment

  • Help identify potential catalysts and market misconceptions / non-recurring events
  • Map conventional wisdom or consensus thinking that is off-mark and subject to change

SENTIMENT

In this stage, we strive to answer the question of why the secular growth theme, or the cyclical drivers previously identified have not been reflected in the stock’s valuation.

Our team

Our investment team operates from New York, São Paulo, and Santiago. This allows us to leverage Itaú’s strong local presence and in-house resources for detailed information flow, “boots-on-the-ground” channel checks, and less dependence on sell-side information.

While the lead PM holds ultimate authority for investment decisions, a disciplined team approach encourages communication and idea sharing. The portfolio manager and analysts confer daily to discuss idea generation, review research, and debate current portfolio holdings and construction, all within the DVS investment framework.

Scott Piper - Global Head of LatAm Equities

Scott Piper

Global Head of LatAm Equities

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Scott Piper - Global Head of LatAm Equities

Scott Piper
Global Head of LatAm Equities

Mr. Piper is CIO of Itaú USA Asset Management and global head of Latin American Equities. He has been a Latin American portfolio manager for over 27 years. Prior to joining IUAM in 2011, he worked for Morgan Stanley Investment Management, where he was a member of the Emerging Markets Group and co-Portfolio Manager of $4 billion in Latin American-dedicated assets. Prior to Morgan Stanley, he was a portfolio manager at Deltec Asset Management where he managed both Latin American and emerging market portfolios. He holds a BA in International Relations from Tulane University and an MBA from IESE Business School in Barcelona, Spain.