Dear investors,

Carmignac celebrated its 35^th anniversary in 2024. I’m not the best at, nor very keen on, reflecting on the past but this is a special occasion. Back in 1989, Carmignac was born from the ambition to make sound investments available to the greatest number of people, breaking down geographical and asset class barriers in pursuit of the best opportunities.

We have come a long way. From 1 to 7 offices. From 1 to 15 distribution countries across 3 continents. From 1 portfolio manager to 60 investment professionals. From 4 to 40 funds and 26 strategies. It’s been our consistent commitment to make a wide set of tools and performance engines generating returns available to all our clients. This meant both innovation and risk management. In 2002, we pioneered the introduction of derivative strategies to enhance flexibility in our portfolios. In 2014, we were among the very first asset managers in Europe to receive approval to access the mainland Chinese markets. In 2015, we added some CLOs to give our funds ammunition to navigate financial repression. In 2021, we extended our investment universe to be able to include selected unlisted securities in our flagship funds which led us to offer our clients, last year, access to premium private equity assets through an Evergreen fund with liquidity features. I could go on like this for a while.

While we are constantly on the lookout for ways to improve our products and skills, certain features at play in 1989 still stand true today: our preserved independence - which many of our competitors have lost – has allowed us to keep on cultivating our active management style, our conviction-driven approach, the alignment of interests with our clients, our mandate to manage our clients’ savings over the long term and the transparency we show in all circumstances. Having the luxury of time, we can be contrarians and stand against the consensus when we feel appropriate.

But enough about the past! Nothing is more interesting to me than the future. Trying every day to go beyond immediate and easy answers to understand where the world is heading and what market participants are under and over appreciating, I must confess, I am wide-eyed about the times to come. The tectonic plates in geopolitics, technology, climate, are shifting, providing fertile ground for profound changes and decisive action.

2025 will start with Donald Trump’s new mandate. Many see it as a huge threat, especially in Europe. Sure, his repeated stands on climate transition are disquieting. Yet these legitimate concerns should not overshadow his meaningful favouring of the investment climate in the US through less regulation, government spending reduction and a technology friendly administration.

What if this election was really about bringing common sense back? The case of the European automotive industry, now infamous for being top-of-the-class when it comes to Europe’s corporate woes, should act as a big kick in the rear. There are just too many rules, labour laws which never benefit the most needy ones, an extreme naivety regarding global trade and endless discussions to find compromises on the lowest common denominator. For years, myself and others have asked for a collective awakening. Such was my latest call this spring for the nomination of Mario Draghi as President of the European Commission. Retirement is a good example. Nobody seriously believes that traditional European pay-as-you-go pension schemes are sustainable. This is common knowledge. Outdated ideological arguments are delaying the implementation of supplementary funded pensions, the only viable option.

What are our politicians waiting for? The absence of courage and the cynical political moves of the previous decades have put us on the brink of collective bankruptcy. Must we wait until the very last minute to take decisive action? Pragmatism should ultimately prevail. They now have a blueprint within the Draghi report. They would be well advised to read it and implement it.

Accordingly, successful investing in the next 35 years will require not only choosing attractive securities from a bottom-up perspective, but also incorporate a thorough geopolitical analysis. We all sense that world growth, going forward, will slow. Countries with poor political governance will be left behind. Already, differential forces are exerting themselves on growth: US versus Europe, India versus China, Argentina versus Brazil...

For my entire life I have had faith in the growth potential of emerging markets and in technology. I still do. Maybe now more than ever. Think of what has been achieved in the last 20 years. All the talent across the globe, the emulation, the creativity and the wealth created. This never ceases to amaze me. And now we are reaching an inflection point with the rise of AI giving birth to new champions and expanding frontiers. Many acknowledge it is a revolution but I believe we still underappreciate the magnitude of the changes to come. Of course, this topic is much larger than the asset management industry, but for us, the answer is simple: we must embrace technology like never before.

I fully trust we will contribute allowing you to embrace the numerous opportunities ahead, while hopefully dissipating the apprehensions they inevitably generate.

Wishing you more than a happy new year. The enjoyment of at least a happy and prosperous new decade with us!

Truly yours, as ever,