Papamarkou Asset Management Finds an Edge In Emerging Markets Investing

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Proactive investors should be taking advantage of improving fundamentals found in emerging markets.

By increasing market liquidity and broadening its export base, Brazil has become increasingly resilient in a time of slowing worldwide economic growth

"Proactive investors should be taking advantage of improving fundamentals found in emerging markets", explains Thorne Perkin, Vice President, Papamarkou Asset Management.

"The current abundance of developing market investment vehicles offer investors more options and better access. As clients have begun to comprehend and appreciate these markets, they see that portfolio exposure here makes consummate sense", says Perkin.

With such high growth prospects, classic emerging markets have evolved into a more traditional allocation in the sophisticated investor's portfolio.

"At Papamarkou Asset Management we've been leveraging our international network as we've increased our portfolio exposure to emerging market economies. Half of Papamarkou's clients are not US based, so we've always paid attention to opportunities overseas, but the fundamentals we're seeing now build a stronger case for investments in these markets.", explains Perkin.

"In the private equity space Papamarkou is investing in India's infrastructure boom. In the hedge fund and long-only arena we're increasing our commodities stake in Brazil. We're purchasing commercial real estate in Slovakia" says Perkin.

"By increasing market liquidity and broadening its export base, Brazil has become increasingly resilient in a time of slowing worldwide economic growth", Perkin says. Indeed Brazil's GDP rate grew in 2007 to over 4% and is forecasted to remain strong in 2008. Brazil's expanding economy has resulted in lower interest rates, a stronger currency and better credit ratings. Markets have reacted; Brazil's overall market capitalization has rapidly increased since 2002 to over $1.3 Trillion today.

"Risk exists and additional policy reform is necessary - continued economic progress depends on a stimulative government. But sharp demand for Brazil's natural resources and a flourishing manufacturing sector will create opportunities. Investors should take advantage of entry points" says Perkin, "and now is the time".

India's economy, also on the heels of large scale structural policy reforms, is poised for terrific growth. With explosive local capital markets, subsidized infrastructure projects and massive foreign investment, the framework for expansion is set.

"India's economy will need to adapt", explains Perkin, "privatization, fiscal consolidation and labor market deregulation are just a few of the issues that need to be addressed". But some economists, based on an analysis of India's recent meteoric growth process vis-à-vis other Asian "miracle economies", project that India's growth could accelerate from recent levels and achieve a GDP rate near 10% as we look to years ahead.

As emerging market economies progress, price dislocations materialize and astute investors can find relative bargains. "Investors should be well advised, understanding the environment and volatility involved" says Perkin. "The positive financial signals are difficult to ignore and the sophisticated investor should capitalize on improved access to developing markets and the remarkable potential to bolster portfolio returns."

Thorne Perkin is a Vice President for Papamarkou Asset Management , an independent SEC registered investment advisor based in New York, NY. Papamarkou Asset Management, founded in 1982, advises the management of several billion dollars for its high net worth US and International client base.

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