Following news that Gary Greenberg will be stepping back from running the £3.9bn Hermes Global Emerging Markets and Global Emerging Markets SMID Equity funds and passing on lead portfolio manager duties to co-portfolio manager Kunjal Gala, Lauren Mason speaks to the duo about their experience working together and what the future holds for both of them.
Gala later joined the investment banking division of Morgan Stanley in India, where he primarily focused on M&A between multinational consumer companies.
In 2006, the now-co-portfolio manager moved to London to continue covering the global consumer sector on the sell side.
He subsequently gained his first portfolio management role running the UK Government's investments during the throes of the 2008 Global Financial Crisis when an almost-unprecedented number of companies required government intervention.
Four years later, Gala joined Greenberg at Federated Hermes and, in 2016, he became co-portfolio manager of the emerging market funds.
"Gary joined Hermes in 2011 and I joined in 2012. At that time, the portfolio looked nothing like it does now. Gary and I had a lot of work to do in terms of repositioning the portfolio; we were missing out on a lot of long-term structural themes and ideas," Gala said.
"It took almost three years to position the portfolio how we wanted it and to implement the processes we wanted to, but the whole process has therefore been an amazing experience for me.
"Gary and I did a lot of travelling together and found ideas that created an amazing portfolio with a great track record.
"I learned to marry structural and thematic changes with the bottom up. I learned from Gary that this is more of an art than a science."
When Gala started at Federated Hermes, the GEM fund was £700m in size. Several years later, it is now the third-largest emerging markets fund in the IA universe with an AUM of £3.9bn.
Over Greenberg's nine-year tenure to time of writing (6 June 2020), the fund has been the second-best performing vehicle in the 112-strong IA Global Emerging Markets sector, having comfortably doubled the gains of the MSCI Emerging Markets index with a total return of 85.5%, according to data from FE fundinfo.
Following the success of the fund and high demand from clients, Greenberg and his team launched the Hermes Global Emerging Markets SMID Equity fund in October 2018.
The vehicle - which invests further down the cap spectrum than its multi-cap counterpart - has also performed well since launch, having returned 9% compared to its MSCI Emerging Markets SMID Cap benchmark's loss of 0.9%.