Thames River Capital has established the Thames River global emerging markets fund, a Ucits that will invest in global emerging markets, including Russia, China, Korea, Mexico and Brazil.
The fund aims to produce a higher level of capital growth than is possible by investing in developed countries around Europe and the US. Thames River Capital believes many emerging market stocks are currently undervalued and under-researched. This could provide investment opportunities where the fund manager believes prices are likely to increase as market conditions change.
A team of emerging markets specialists headed by Rory Landman will manage the fund. Landman, who has over 12 years' experience of investing in emerging markets, joined Thames River Capital in September 2000. He was previously head of global emerging markets at Baring Asset Management, where he managed the Baring Emerging Europe trust and Baring global merging markets chrysalis fund.
The team has identified three themes that will help them in the stock selection process. Firstly, they believe restructuring and globalisation is causing Mexico, Korea, Taiwan and central Europe to catch up with developed countries.
Secondly, countries such as Chine, Russia and India at an earlier stage of development than the first group of countries, with the potential for higher returns as a result of the higher risk.
Finally, Brazil and Argentina are viewed as cyclical economies which are likely to be politically and economically unstable, so investment opportunities are short term.
Emerging markets have recently performed well relative to more developed countries due to strong growth in Russia and stockmarket rallies in Brazil and Mexico. However, with global stockmarkets in the doldrums and the Middle East conflict adding to the uncertainty, few investors are likely have the appetite to invest because of the high risks.