The growing importance of emerging and frontier markets in global investors’ portfolios means the need for reliable insight about these markets is greater than ever before.
But for most investors, it remains difficult to find.
Mainstream media sources, for all the added attention they’ve given to the subject, largely fail to deliver accurate and timely information pertaining to real opportunities, while the on-the-ground, actionable expertise of seasoned investment professionals operating remains obscure or inaccessible to many investors.
Now, a new not-for-profit organization is trying to close this knowledge gap.
The Emerging Market Investors Association (EMIA) launched last May to educate global investors about developing market investment and to connect them with the right investment professional.
Through its website and a variety of media, EMIA publishes free information on developing market investment and related topics, while providing developing-market-focused investment professionals crucial exposure and a platform for delivering their expertise and actionable advice to a global audience.
The association is the first of its kind devoted exclusively to developing markets across asset classes, already garnering high-profile members such as Sturgeon Capital, Greylock Capital, Asia Frontier Capital, and others.
“Emerging and frontier markets have grown enormously in importance precisely during the so-called “information age,” said Nate Suppaiah, EMIA’s founder and director, in a recent interview. “And that makes the paucity of reliable information about these markets and the investment professionals working there all the more shocking.”
He says mass media coverage of developing markets usually gives partial accounts of geopolitical dramas, ephemeral investment trends, and the oft-misleading performance of equities markets. Meanwhile, strong investment stories are missed (particularly in alternative asset classes), and knowledgeable, on-the-ground investment professionals are ignored.
“The idea behind EMIA is that emerging and frontier markets are here to stay and they’ll be increasingly relevant over time. But the purpose is not to say, ‘Invest in emerging markets now!’ We’re not marketing a trend. We’re marketing actionable investment expertise and helping to educate investors.”
Dedicated to education
Mr. Suppaiah has spent much of the last decade educating investors about emerging markets, largely as a publisher. A former broker at Oppenheimer, he founded the magazine Alternative Latin Investor in Buenos Aires in 2009, focusing on alternative asset class investing in Latin America.
The magazine’s thesis remains true today: While Latin American markets offer excellent opportunities to sophisticated investors, it’s difficult to get exposure to these markets through conventional investment vehicles. Instead, alternative asset classes are often the best way to get exposure to the region.
Mr. Suppaiah published ALI from 2009 to 2012, during a veritable golden age of alternative asset class investment in Brazil, Colombia, Mexico, Peru, and elsewhere.
As he saw investor interest expand to other emerging markets – and saw increasingly strong ties forming between developing market economies – Mr. Suppaiah reconceived and rebranded his magazine venture in 2012, launching Alternative Emerging Investor. AEI added Africa and Asia to its coverage of alternative asset class investment, while incorporating other relevant though frequently overlooked topics such as corruption and cyber-security. The focus remains on delivering actionable insight from top investment professionals.
Knowledge sharing
EMIA builds on Mr. Suppaiah’s publishing pursuits, delivering analysis and opinion from expert contributors on its website along with proprietary material from partner media outlets including Roubini, the World Bank and Barrons. AEI is now EMIA’s official magazine.
But it also represents Mr. Suppaiah’s move from merely covering emerging market investment to working with investors and investment professionals directly.
“I see it as the final piece of the puzzle, personally. I want to continue publishing valuable information, but I also want to start taking what we’ve learned over the years to make the right connections for people in the industry.”
One of the most important developments he’s witnessed in covering these markets, Mr. Suppaiah says, is that the quantity and quality of sophisticated, local investment professionals continues to rise.
“Investors need information from the right human resources on the ground, particularly with alternative asset classes. I know first-hand that those resources are there. EMIA is an effort to connect them with investors.”
A recent report sponsored by Principal Global Investors emphasizes the importance of local expertise in emerging market investing. Investors are becoming increasingly discerning when it comes to developing market investment as a whole, the report found, attuned to the diversity and inconsistency of opportunity and the prevalence of volatility. Increasingly, these investors are making tactical, opportunistic investments, requiring “high-conviction specialists” to help them navigate these markets and make deals.
Likewise, Mr. Suppaiah says his years of interviewing hundreds of investors and investment professionals from around the world taught him that local, sophisticated, on-the-ground expertise is crucial.
“The new age of emerging market investment isn’t just about new opportunities or new versions of the same opportunities. It’s about harnessing sophisticated knowledge of these markets from people who really understand the dynamics at play.”
Marketing for investment professionals
Another issue Mr. Suppaiah has witnessed over the years, and which EMIA aims to remedy, is the lack of marketing resources among developing market investment professionals, particularly in boutique firms.
“Many of the great boutique firms don’t have the time, budget, or skills to market themselves effectively to global investors,” he explains. “We help them by providing exposure and a platform.”
Each EMIA member is given a profile page on the website. Profiles are published in AEI magazine and on a rotating basis on the EMIA homepage and in its newsletter.
Members are also invited to share their expertise in the magazine or via webinars hosted by Mr. Suppaiah himself, which are made freely available as podcasts on the website.
“We’re trying to bring 21st-century-style marketing, knowledge exchange, and networking to an industry that sorely needs it,” he says.
The changing landscape of global investing
Investor perception of emerging markets has completed a full cycle since Mr. Suppaiah launched Alternative Latin Investor in 2009. The aftermath of the global financial crisis saw an unprecedented influx of capital into emerging markets, only for the tide to change in 2012 and 2013 as growth statistics and the effects of quantitative easing in the US, among other factors, sent many global investors back to developed markets.
Now, EMIA has appeared with a new wave of investor optimism regarding developing markets in general and frontier markets in particular.
“These cycles are a reality of developing markets,” he says. “In fact, they account for many of the best opportunities, as well as for the savvy of the investment professionals working there. The best managers know how to weather these cycles and use them to their advantage.”
He says the recent optimism reflects a broad awareness that the long-term growth story is still valid in many developing markets, while transparency and policies continue to improve. He emphasizes, however, that the concept of “emerging markets” is changing – and goes well beyond the BRICS of yesteryear.
“The BRICS are no longer the only game in town. Five or ten years ago, they were obviously the main story among developing markets, and we can be thankful to Jim O’Neil for coining and marketing the term – he really captured a certain zeitgeist.”
“But they were sort of like a door that investors could pass through. They were easy to understand, they had big economies that mirrored other big economies that people knew about, they had transparency relative to frontier markets. But as people got accustomed to them, they began looking elsewhere. You could say investors have become more familiar with the unfamiliar. The BRICS remain massively important to the global economy, but investors are willing to look elsewhere to find what’s right for their portfolios,” he says.
“But again, that requires education and the right people. EMIA exists so that investors can find both.”
For more information visit EMIA or contact Tiffany Swenson – PR/Membership Director – tiffany@emia.org.