The coronavirus pandemic has only accelerated growth trends and there will "never [be] room for value" in PGIM-owned Jennison's head of global equity Mark Baribeau's portfolios, the manager has said.
The co-manager of the PGIM Jennison Global Equity Opportunities fund, who has headed up the $358m vehicle since 2015, explained the crisis has only served to "accelerate or highlight" the key trends the team has been playing since the start of the year, including e-commerce, digital payments and the digital transformation of enterprises.
"The pandemic has not changed our focus at all - it has reinforced our view that these are the better ways to distribute products, these are the better ways to manage your companies and these are the better ways for consumers to live," he said.
These trends are defined by Baribeau as the "NEXT - or New Exceptional Technologies - economy", and also include health technology, mobility and autonomy, on-demand consumption, and the global consumer.
Within this framework, the fund seeks out companies that are "emerging as market leaders in their specific industry" with "typically unique business models" that hold certain competitive advantages.
"We really like it if the company has developed a proprietary technology or it is enjoying a network effect in business," said Baribeau.
"In other words, the bigger the platform gets, the more consumers use it, the more robust the product offering, the more businesses want to be on that platform, and you get a self-fulfilling ecosystem that becomes hard for competitors to penetrate."
He added "good old-fashioned economies of scale" also play a part in their stock selection.
From here, there are three core "catalysts for growth" that the "big double-digit compounders" offer, driving the fund's performance over time.
"Number one, and maybe the most important, this company is introducing a very disruptive product or service to the market," the manager explained.
"Secondly, which is more common, is just new product cycles. Innovation is the lifeblood of all successful businesses out there.
"Lastly, we look for companies where their addressable market is expanding. Perhaps they are moving into a new geography or they are moving to an adjacent vertical market."
"What we are trying to find are structural winners," Baribeau continued. "These are companies that are either defining the structural shift in an industry…or they are benefiting from the structural shift in the industry.
"When you tend to come at the market from this focus, you obviously migrate to growth companies because they are winning."
PGIM Jennison Global Equity Opportunities fund has returned 47% year-to-date, outperforming both its global large-cap growth equity peer group's average gain of 34.2% and its MSCI ACWI Growth benchmark's return of 28.3%, according to data from Morningstar.