The inability of multinationals to keep growing will subdue equity markets.
The returns on investments in global equities markets will be increasingly subdued by the inability of large multinationals to keep expanding.
The world had become simply too small for some organisations to continue to increase revenues at a steady pace, according to Global Thematic Partners chief executive and portfolio manager Oliver Kratz.
"Global equity markets can only do well if you have the ability to grow. That means the largest companies in the world have to grow," Kratz said.
But some of them had now become "too big to sell", he said.
"A company like Nestle, with US$100 billion in sales every year, in order to grow by 10 per cent it needs to do another US$10 billion in sales," he said.
"If you assume that the average Nestle product is US$2, they need to sell another 5 billion units every year.
"Let's assume that everyone buys a Nestle product every month, then you have 500 million additional people that need to buy an additional product.
"That is the reason why we are concerned, because the world is not enough."
He argued there was a limit to the number of new markets a company could expand in and that for a growing number of companies options were running out.
"Nestle is in emerging markets, so is Apple, Walmart and BMG," he said.
"They have already penetrated them, so the story of the '90s, going into Asia, cannot be told again. We have done it."
Kratz spoke last week at a Deutsche Bank conference in Sydney.
Global Thematic Partners was established earlier this month, when Deutsche Bank spun off the DWS Global Thematic Fund into a separate boutique, which is now owned by its staff.
The firm has about US$9 billion in funds under management.
