Co-Head of Global Value Investing Matt McLennan sits down with NYSE’s Bilal Little to unpack how First Eagle is navigating today’s chaotic markets, from sovereign debt risks to overlooked gems in international equities, and why patient, scarcity-driven investing still wins in the long run.

From Papua New Guinea to Wall Street: Matt McLennan’s Global Investing Journey

Matt McLennan didn’t take the straight path to portfolio management.

Raised in Australia, he kicked off his career in global equities at the Queensland Investment Corporation.

He moved on to Goldman Sachs, where he worked across banking, equities, and investment strategy. One of his first IPOs was a gold mining company in Papua New Guinea — the country of his birth.

Eventually, he found his ideal fit at First Eagle Investments.

What drew him in was not just the global scope but the firm’s investment temperament.

First Eagle thinks long term. It values patience. And it understands that investing is more like gardening than lawn mowing.

Resilient Wealth Creation, Not Benchmark Hugging

First Eagle’s guiding philosophy is “resilient wealth creation.”

That means preserving and growing capital in real terms over time. Unlike many asset managers who obsess over tracking error, First Eagle defines risk more personally: the permanent impairment of capital.

To manage this risk, they invest with a bottom-up, scarcity-driven approach.

They seek businesses with strong market positions and durable advantages, avoiding flashy trades in favor of building portfolios that can weather economic storms.

Patience and flexibility are core principles, and they do not try to predict the future.

Instead, they focus on owning assets that can survive whatever the market throws their way.

Sovereign Risk Is the Quiet Threat No One Is Talking About

Asked about today’s macro landscape, Matt pointed to something fundamental. The real driver of many current market risks — from inflation to global tensions — is growing sovereign debt.

Countries around the world, including the United States, are running large deficits even with low unemployment. This mismatch could cause long-term inflation and erode the real value of nominal investments.

That’s why First Eagle is cautious on low-volatility assets that are fixed in nominal terms, like long-term bonds.

Without high enough yields to compensate for inflation, investors may face hidden losses. Instead, the team leans into assets with real, enduring value.

What First Eagle Buys: Scarcity and Positional Power

First Eagle focuses on companies and assets with inherent scarcity or strategic position.

These include:

• Natural resources with long-life, low-cost basins
• High-quality real estate in premium locations
• Businesses with intangible moats, such as:
• Precision manufacturing dominance
• Iconic brands with pricing power
• Network effects, either physical (retail chains) or virtual (software platforms)

The key theme across all these assets is density — whether it's a dense market share or a physical density of assets in valuable locations. Scarcity and density often go hand in hand, and both support long-term pricing power.

Why International Equities Are the Quiet Performer

Despite most investors favoring domestic exposure, First Eagle has always had an international DNA.

Its global equity strategy launched in 1979 as a truly global vehicle.

That head start has built institutional memory and local-market expertise that is hard to replicate.

Today, international equities make up about half of their portfolios.

Given how stretched U.S. equity valuations are, especially in a few megacap names, Matt sees more opportunity abroad.

Even with some recent outperformance, international equities still look cheap relative to historical norms.

Investors often overlook non-U.S. companies that dominate in niche sectors.

These include luxury brands, factory automation leaders, and undervalued holding companies.

The U.S. might lead in tech headlines, but it does not have a monopoly on high-quality businesses.

A Balanced View on Gold

First Eagle has long held a thoughtful position on gold.

They view it as a scarce, defensive asset — not because it’s industrially useful, but because it isn’t. Gold’s lack of utility is exactly what makes it valuable as a monetary hedge.

Matt likens gold to “scarce, defensive land.” It doesn’t generate yield, but it also doesn’t carry the risk of being inflated away like fiat currency.

Historically, gold has performed best in equity downturns and periods of macro uncertainty. First Eagle uses it carefully, generally keeping exposure between 5 and 15 percent of a portfolio.

The ETF Strategy: Same Philosophy, New Format

First Eagle’s move into ETFs wasn’t a pivot — it was a client-driven evolution. Investors wanted the same scarcity-focused, value-oriented philosophy, just in a more flexible wrapper.

Their ETFs focus on equity holdings, sometimes including gold miners or royalty companies, depending on valuation and opportunity.

The First Eagle Global Equity ETF (FEGE) blends U.S. and international positions with a bottom-up view. The Overseas Equity ETF sticks to non-U.S. names. This allows advisors to customize portfolios while still relying on First Eagle’s research process.

Tech, AI, and the Real Price of Growth

First Eagle isn’t anti-tech. They like innovation but they just don’t want to overpay for it.

Rather than chasing hyped-up names, they’ve invested in less obvious AI beneficiaries, like Japanese factory automation firms, software companies optimizing databases, and logistics firms using AI for network planning.

Their exposure to tech is below market weight, not because they doubt AI, but because they are valuation conscious. Growth is great, but only when the price makes sense.

Risk Is Not the Enemy. Mispricing Is

Matt put it well: “Risk just is.” It’s not good or bad, but it has to be understood. Markets are currently pricing in a lot of optimism — low credit spreads, high multiples, and little room for policy missteps.

First Eagle isn’t making big macro calls, but they are positioning cautiously and rebalancing into quality when prices get stretched.

Earlier this year, they rotated into more cyclical names when prices fell.

More recently, they trimmed positions as valuations ran up. This discipline — letting price guide action — is key to long-term performance.

The Underdog with Potential: Overseas Equity

Asked for one overlooked opportunity, Matt pointed to their Overseas Equity strategy, the First Eagle Overseas Equity ETF (FEOE).

While it’s done well this year, it remains a long-term underperformer relative to U.S. stocks. That could be changing.

Many of the most compelling opportunities, especially in high-quality businesses trading at attractive prices, are now outside the U.S. First Eagle’s team believes investors may want to lean into global diversification before the rest of the market catches on.

Final Thought: Playing the Long Game

First Eagle is not chasing momentum.

They’re not swinging for the fences. They’re playing a steady, long-term game rooted in scarcity, valuation, and risk awareness.

For advisors and investors looking for durable capital preservation and growth — especially in a world that looks more uncertain than ever — their approach offers a refreshing dose of sanity.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.