Emerging Markets Rising
There is a general undercurrent of optimism among investors as the world’s emerging markets take the lead in the global economic recovery.
During the past month, the analyst team at BHA interviewed 43 firms that were actively looking to hear from alternative fund managers focused on emerging markets. Nearly half of that interest was in China-focused funds.
Prior to 2008, China was spurring global economic growth that was consistently in the double digits. Today, the country is once again at the forefront, but its economy is not the only one that is expected to expand during the next several quarters. The director of investments at a Midwestern wealth advisory firm told BHA that in addition to China, his firm is focusing on investment opportunities in Brazil, India, and Russia as a result of the anticipated growth in those regions. In addition to Brazil, some private equity and hedge fund investors cited other South American countries as of significant interest.
Analysts at BHA also have seen a significant increase in the number of investors interested in CTA funds, with over 200 expressing interest during the fourth quarter alone. As emerging markets resume expansion and growth, so, too, will they resume consumption of natural resources and commodities, driving prices higher.
The head of due diligence at a New York family office stressed that the firm is interested in any funds that are uniquely situated to make directional bets on the commodities and natural resources sectors heading into the first quarter.
As the global economy begins to recover, investors seem keen to be on board. Funds focused on emerging markets and commodities and natural resources are the investments of choice heading into 2010.