Hedge Fund Attraction to Emerging Markets Set to Grow
Emerging markets were once seen as risky, but capital inflows — in particular from hedge funds — show how that mindset has changed.
By Udayan Gupta
Three years ago Roland Nash, one of the most astute economists and investment strategists in Russia, quit Moscow-based investment bank Renaissance Capital to join tiny Verno Capital, a specialist start-up focused on emerging markets.
In the quarter ended December 2012, according to Chicago-based hedge data firm HFR, hedge fund capital invested in emerging markets rose $11.2 billion to a record $139 billion. HFRs HFRI Emerging Markets Index gained more than 10 percent for all of 2012, including a gain of 4.8 percent in the fourth quarter, with contributions across each of the BRIC economies, representing an increase of R$272 billion in Brazil, RUB 4.2 trillion in Russia, 7.5 trillion rupees in India and 867 billion yuan in China.....
Weve got lots of new money looking at emerging markets the money that used to be invested into the U.S. or European countries, Nash said at the time in an interview with Russian television network RT. Since then, the flows have only gotten greater.