East Capital unveils frontier markets strategy
East Capital has launched its Frontier Markets strategy. The fund management group which has been investing in emerging and frontier markets for nearly two decades, has broadened its investment universe to include Africa, the Middle East and Latin America.
As part of the strategy launch, East Capital said it plans to launch a new fund focusing on global frontier markets, expected in mid-December 2014.
The fund will have a global focus, spanning from frontier Asia through the Middle East and Africa to Europe and Latin America. It will also invest in fast-growing countries beyond the frontier, markets that today are unclassified but form the future generation of frontier markets. East Capital already manages around $450m in regional frontier assets across asset classes drawing on its longstanding track record and experience, the company said.
Speaking on the importance of frontier markets, Emre Akcakmak, portfolio manager at East Capital, added: “Demographics are one of the key drivers. No matter what, young and growing populations in frontier market regions will, in the next couple of decades, continue to boost economic activity and therefore offer a vital engine for growth. Furthermore frontier markets are attractively priced, with 9x P/E valuations on average while developed markets are priced at 15x earnings and emerging markets at 11x. Frontier markets also provide a unique diversification opportunity.”
Peter Elam Håkansson, chairman of East Capital, commented: “At East Capital, we believe frontier markets are the next generation of emerging markets. We have almost two decades of expertise in frontier markets such as the Balkans, the Baltics, Central Asia and have also entered Asian frontier markets more recently. Not only is this asset class very attractive, but more importantly our investment strategy based on fundamental research and stock picking is proven and works well. Staying true to our core investment philosophy, we are launching a fund focusing on frontiers globally”.
“East Capital is synonymous with exploring new markets and being on the ground. For nearly two decades, East Capital has successfully identified and invested in many companies across emerging and frontier markets which were in an early stage of development. Our recent visits to companies in Kenya, Saudi Arabia, Vietnam and Nigeria only confirm the positive growth trend for global frontier markets. In fact, if frontier markets were a continent they would account for 13% of world population but only 4% of world GDP. We are taking an increasingly global perspective in our quest to find the best investments in the next generation of emerging markets around the world”, added Håkansson.