Interview with Carmignac Investissement Fund Manager Kristofer Barrett on Global Markets and Artificial Intelligence
Carmignac Investissement manager Kristofer Barrett shares his strategies on artificial intelligence investments, emerging markets, SMID companies, and EV/FCF valuation metrics.
Kristofer Barrett, manager of the Carmignac Investissement fund, evaluated structural changes in global equity markets, detailing the artificial intelligence investment cycle, emerging market opportunities, and portfolio construction strategies.
Artificial Intelligence Cycle and Investment Focus
The artificial intelligence investment cycle continues to be one of the fund's highest-conviction areas. While demand for computing power is growing rapidly, strong earnings growth is observed across the semiconductor ecosystem. Hyperscalers are allocating massive budgets for infrastructure.
The Role of Emerging Markets in the Portfolio
As of the end of August, emerging markets account for approximately 26% of the portfolio. This proportion reflects bottom-up stock selection rather than a top-down allocation. Taiwan and South Korea play critical roles in advanced semiconductor manufacturing.
Advantages of the EV/FCF Valuation Metric
Instead of traditional earnings multiples, the fund uses the Enterprise Value to Free Cash Flow (EV/FCF) metric as a central tool. This metric allows for comparing the cash-generation capacities of companies with different growth profiles on a common ground.
Risk Distribution and Position Sizing
The portfolio holds approximately 80 stocks to balance conviction and diversification. Position sizing is not determined solely by conviction; factors such as valuation, downside risk, and liquidity are also integrated into the process.
SMID Companies and Hidden Opportunities
More than 20 SMID-cap companies make up roughly 10% of the portfolio. Niche leaders, such as Japan's Nitto Boseki, which manufactures specialized glass fiber used in advanced semiconductor packaging, are evaluated within this scope.
Infrastructure in the Artificial Intelligence Value Chain
Beyond chipmakers and hyperscalers, critical tool and material suppliers such as DISCO, Grand Process Technology, and JX Advanced Metals also stand out. These companies enable the expansion of physical computing capacity.
Agentic AI in the Software Sector
The advancement of agentic AI will create winners and losers in the software sector. Companies integrated into critical workflows, possessing proprietary data, and offering high switching costs have the potential to stand out during this process.