Earlier this year, Collins St announced that their Global Fund was now open to public investment. In a recent interview with Money of Mine podcast, Chief Investment Officer Vasilios Piperoglou discussed a wide range of thematics and opportunities that lie within this expanded mandate.

 Here are some highlights of Vas’ interview.

Collins St launched its global equities fund in early 2024, opening the door to opportunities beyond the Australian market.

Whilst we initially found value in a number of Chinese businesses listed in Hong Kong, such as online retailer JD.com. As these businesses reached their intrinsic value we reduced many of our positions.

Recent investments range from a Kazakh fintech company trading on six times earnings to UK-listed classified businesses caught in the AI sell-off and, perhaps most surprisingly, Australia’s largest almond producer.

The common thread isn’t geography or sector.

It is valuation.

In a market increasingly driven by momentum and narratives, some of the most compelling opportunities are emerging in places few investors are paying attention to.

Destination: Kazakhstan 

Kaspi.kz is a dominant fintech, banking and payments platform that has become deeply embedded in the Kazakhstan economy.

If consumers pay utility bills online, there’s a good chance they’re using Kaspi. Retail payment terminals are powered by Kaspi infrastructure. The company also operates a major banking franchise and has expanded into logistics and e-commerce.

Despite generating earnings growth of roughly 15-20% annually, the company trades on around six times earnings.

Kaspi effectively holds a monopoly on handling financial transactions in the country.

But the market’s concern stems largely from geopolitics.

Following Russia’s invasion of Ukraine in 2022, investors began questioning whether Kazakhstan could become exposed to similar regional instability. As a result, Kaspi’s valuation collapsed despite continued earnings growth.

That disconnect is precisely what attracted us.

After investment in achieving a banking license in Turkey, Kaspi has recently reinstated its dividend, with distributions equivalent to roughly 10% of its current share price, while still retaining substantial earnings to fund future growth.

For a business of its quality and market position, we believe the low valuation remains difficult to justify.

AI Generated Opportunity

Artificial intelligence has become one of the market’s most disruptive forces, prompting investors to reassess entire industries.

However, that fear might also have created opportunity.

The Global Fund recently invested in two UK-listed online classified businesses: Rightmove and Auto Trader, effectively Britain’s equivalents of REA Group and Carsales.

Both companies have faced investor concerns that AI could eventually disrupt their business models.

Our belief is that those fears underestimate the complexity of what these businesses actually do.

The market has focused on the front end and forgotten about the back end. While AI may make it easier to build consumer-facing software, the underlying infrastructure supporting these platforms remains extraordinarily difficult to replicate.

Auto Trader, for example, maintains relationships with thousands of independent dealerships across the United Kingdom. The business employs hundreds of representatives who work directly with dealers, helping manage inventory, listings and advertising.

Similarly, property portals rely on extensive relationships with real estate agencies and agents built over decades.

These networks create powerful barriers to entry that cannot simply be recreated using newer technology.

The result is a market that may be overestimating disruption while underestimating competitive advantages.

A thematic of one?

The most attractive investments often emerge when supply and demand become badly misaligned. It’s a framework that has driven our successful investments in uranium, oil services and gold.

Following this framework, where do we see a new thematic emerging?

Collins St has become increasingly bullish on Select Harvests, Australia’s largest listed almond producer.

The underlying dynamics are surprisingly similar to many of the capital cycle opportunities we have successfully identified in the past.

Global demand for almonds continues to grow steadily, driven by rising consumption across China, India and the Gulf region.

At the same time, supply is beginning to contract.

Many almond orchards established during the previous boom are now reaching maturity and reducing productivity. Years of weak pricing have discouraged new plantings, while some growers have removed orchards altogether.

The situation is particularly acute in California, which accounts for approximately 70% of global almond production.

Water shortages, regulatory constraints and rising costs have further reduced the industry’s ability to expand supply.

As a result, almond prices have begun recovering from cyclical lows.

And this might only be the beginning.

We are only one or two years into the almond bull market. Importantly, demand appears relatively resilient even if prices continue rising. Consumers may adjust behaviour at the margin, but almonds remain a staple ingredient across a wide range of food products.

Meanwhile, Select Harvests has strengthened its balance sheet and continues to trade at a substantial discount to the replacement value of its underlying assets.

For us, the attraction is easy to understand.

It’s a capital-intensive industry. Supply has been constrained and demand continues growing. And the market has yet to fully appreciate the implications.

All these point to another successful thematic for our portfolio, except that there is only one listed business in this industry.

Could Almonds form a thematic of one?