While international markets have more volatility and lower trust, their biggest advantage is inefficiency. Many basic services are underdeveloped, creating enormous 'low-hanging fruit' opportunities. Providing a great, reliable service in a market where few things work well can create immense and durable value.

The fund owns Walmart de México (Walmex), accessing the same proven business model as the US parent but at an earlier growth stage and a much lower valuation (15x vs. 40x P/E). This is a clear play on geographic valuation arbitrage for a high-quality asset.

The valuation gap between Airwallex ($8B) and Ramp ($32B), which have comparable revenues, demonstrates a tangible "Asia discount." Investors significantly mark down companies with a strong presence or founding nexus in Asia due to perceived geopolitical and data security risks.

The founder of Tiendas 3B, Anthony Hattum, identified the successful discount retail model of BIM in Turkey and replicated it in Mexico. He did so despite not knowing Spanish, demonstrating the power of a proven business model and founder conviction to overcome significant barriers.

A powerful EM strategy involves identifying businesses with proven, powerful models from developed markets, like American Tower. Local EM investor bases may not be familiar with the model's potential, creating an opportunity to buy these companies at a displaced valuation before their predictable results drive multiple expansion.

For a rapidly compounding business like TBBB, which aims to grow from 3,500 to 15,000 stores, the initial valuation multiple becomes less important over a long-term horizon. The exponential growth in earnings can overwhelm the entry price, similar to early investments in Walmart or Costco.

Most successful hard discount retailers like Aldi, Lidl, and BIM are privately held. Tiendas 3B's status as a public company is unusual, likely stemming from its founder's private equity background and initial capital needs. This provides a rare opportunity for public market investors to access this model.

New entrants in discount retail struggle with a paradox: achieving low prices requires massive scale, but building that scale is difficult without the attractive unit economics that low prices provide. Tiendas 3B spent nearly two decades solving this, creating a significant competitive moat.

Profitable Chinese giants like ByteDance trade at a fraction of their Western counterparts' multiples. This "China discount" stems not from business fundamentals but from the unpredictable risk of the Communist Party "smiting" successful companies and overarching geopolitical tensions, making them un-investable for many.