International Fund: A Chronicle of Transition and Opportunity

June 2025

 

The transition of the Pembroke International Growth Fund is now complete. As with most worthwhile transitions, it came with its share of moving pieces and early mornings. But it is now finished—and finished properly. Pembroke now officially and directly manages the strategy, with a fully dedicated and expanded research team at the helm. This team is focused squarely on uncovering international equity opportunities.

This transition was a meticulously planned and tightly choreographed endeavour that enlisted virtually every part of the firm. Every department had a role to play, from Compliance to Operations, and from Research to Trading. Overall, it was all handled with quiet precision.

CAREFUL EXECUTION

Our trading desk shouldered the lion’s share of the logistical weight.

Particular recognition is due to our head trader, Sia Destounis, whose internal clock seems to be governed less by geography and more by the global settlement cycle. She dealt with brokers in Tokyo before dawn, custodians in New York before breakfast, and final settlement confirmations long after most people had left the office.

Thanks to her commitment, not only were trades executed, but they were also settled accurately, on time and without surprises.

A NEW GROWTH PORTFOLIO

Of course, none of this operational excellence would matter if there were no newly constructed portfolio ready to be set in motion. That was the responsibility of the research team.

Long before the May 1st transition date, our analysts were busy preparing. They constructed, monitored and refined a shadow portfolio (with real money) that closely mirrored our intended holdings. Management teams were met. Annual reports were read. Sector theses were debated, disassembled and rebuilt. This process also provided insight into our current holdings.

All of this was done in pursuit of the same objective: to ensure that, when the time came, we would be ready to allocate capital to a select group of 35 to 45 international businesses—companies that we believe exhibit durable advantages, strong governance and clear paths for long-term growth. And all at reasonable prices, an art form in itself.

A FAMILIAR LANDSCAPE

What surprised us—though perhaps it should not have—was how familiar many of these businesses were. Having studied North American companies for years, we have consistently evaluated the international competitors they face. To understand a domestic champion, it is often necessary to know the global landscape in which it operates.

In that sense, this move into international equities is less a step into the unknown than a natural extension of our investment approach. It also reflects a broader truth about the nature of modern business: the world is more connected than ever. Few companies operate in isolation, and few supply chains respect borders.

Even the most domestically oriented firms are influenced by foreign customers, global competitors or geopolitical realities. Whether it is luxury goods in Asia, precision manufacturing in Europe or niche software providers in Israel, our investment universe is, and has long been, borderless.

POLITICS AND LONG-TERM INVESTING

Of course, the political conversation sometimes argues otherwise. In the recent months, trade wars, tariffs and the populist urge to “bring it all back home” have re-entered the headlines. However, at Pembroke, we take a longer-term view. Policies change. Tweets subside. Amid the noise, enduring businesses continue to grow.

Occasionally, the volatility created by headlines provides us with the very opportunities we have been waiting for: opportunities to purchase high-quality assets at favourable prices. In that sense, market dislocation is not a cause for concern. It is often a reason to take action.

ATTRACTIVE VALUATIONS

From a valuation standpoint, we believe the timing is right. Over the past decade, U.S. equities have enjoyed a remarkable period of growth, fuelled by innovation, low interest rates and momentum. However, this success has come at a literal cost. Valuations in U.S. markets have become stretched by many measures, especially compared to their international counterparts.

In our view, international markets currently offer better value, a greater margin of safety and better prospects for long-term, risk-adjusted returns. This does not mean abandoning North America. It means expanding our opportunity set. It means applying the same Pembroke discipline—our long-term perspective, fundamental research and preference for quality—to a broader canvas. It means leveraging our experience to serve our clients’ aspirations.

And so, a new chapter begins. It opens with fresh ideas, new names and currencies, but also with the same steadfast principles that have guided Pembroke for decades. We remain committed to patient compounding, thoughtful stewardship and partnering with great businesses wherever they are based.

We are excited to see where this takes us. The world is vast, and our work has only just begun.

 

---

To learn more about the team, we also invite you to watch the virtual discussion with the Fund’s two portfolio managers held at the end of April.

 

Back to Top of Page

Other Articles Of Interest