How to get into Emerging Markets Investing

Hey guys,

Curious if anybody has thoughts on how to get into Emerging Markets investing. The definition of “emerging markets” can vary, sometimes including frontier markets, etc, but we’re talking about the BRICs, Vietnam, Thailand, etc…

I find these markets interesting to read about and research - obviously given their projected growth trajectories they will undoubtedly gain more attention as they become a larger part of the global economy. However, I don’t have much practical experience with any of these markets, any every job description seems to want experience investing in such markets. How does one break in?

I looked at a couple profiles of EM analysts and it seems that backgrounds include:

  1. They come from that specific region or country. Many don’t have finance experience (one was a policeman!) - it doesn’t seem to be a prerequisite.

  2. They somehow got assigned to cover that region, early in their career. These are mostly the “white guys who invest in X country”. I’m not even sure they actually speak the language fluently. I’m not exactly sure how important language fluency is (there seem to be many white americans who are experts in Asia)?

Curious if anybody has thoughts on this, or knows somebody who does EM - what was their path?

You’re 10-15 years too late for emerging markets. Most of the great returns have come and gone. Look into Africa.

Thanks FT - I agree with you. However, I’m not looking at this to make a huge return - more from a career perspective. I find these markets to be quite exciting and interesting to cover.

Many EM funds are branching out into some “frontier” markets, and not the ridiculous Middle East Financials weighted one MSCI publishes…its like 75% Kuwait, Saudi and Nigeria. The funny thing is the MSCI weights on liquidity but the liquidity premium can be very large for some frontier markets, so the index is insanely inefficient…fertile ground.

In terms of the OPs question: you are a charterholder, so what is your background?

In response to your very general question, I think you should learn Spanish, Mandarin, French and English, go work for a major strategy consutancy (Bain, BCG, McKinsey) in an EM country, be raised in an EM country other than the one in which you work and Cambridge Undergrad with Harvard MBA. That should do it.

And make sure you have a ten-incher that you can slap down on the table. That will garner plenty of attention.