VEF: An emerging star - ABG

An intriguing opportunity to tap into the private fintech market
VEF is an investment company founded in 2015 through a spin-off from VNV Global. The company invests in private fintech players in frontier and emerging markets, with a heavy tilt towards Latin America. We find the opportunity in emerging markets especially attractive, as the segment is estimated to account for 50% of global GDP growth over the next 20 years, thus offering a superior long-term growth profile. In addition, we believe that disruptive digital fintechs can benefit especially in emerging markets as they can help customers avoid the expensive services of traditional banks. We find VEF’s profile intriguing, as there are currently few ways to tap into the growing digital fintech theme in either public or emerging markets. VEF targets well-managed businesses with all lines of financial services, including payments, credit, savings and investments. The company focuses particularly on highly populated and scalable markets, such as Brazil, India, Mexico and Pakistan, as these represent the largest structural growth opportunities.