Emerging Market AM
Currently very interested in emerging market equity / debt AM and at the moment I am working in SS ER in EMEA equities. I was wondering if anyone had any insights into:
1. landscape of emerging market AM - do larger shops have an advantage vs boutiques?
2. If you work on developed markets SS ER (EMEA/US) can you move easily into EM roles on buyside straight away or is the journey longer?
3. Language wise apart Chinese, which languages are considered useful - I imagine Spanish for LATAM but what about MENA / India etc - would English be fine?
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I think your EMEA experience would lend itself well to making a move towards EM (would be tougher w/ just US exp.)
thanks for the answer!
1.) one benefit of the dedicated boutique is not having to explain over and over again no this isn't 1980's LATAM,1994 Mexico, 1998 Asia/Russia etc and that not all countries are Argentina to internal stakeholders.
2.) the better "training" can be valued and a lot of extracting alpha in EM can be porting similar type strategies from DM with adjustments, though the transition only works if you have a "hook" i.e. language/regional focus etc.
3.) languages matter a bit more in equities if a regional focus. ironically matter less so as a PM for a global mandate since how can any one speak them all (though on index weight alone Chinese would help). that said have to be an analyst first so where the language comes in (backwards but is what it is). net net better off learning a stats/coding language than real one imo.
Thanks for the answers, very useful information! Interesting point about coding being more useful, I would have though that at least for fundamental strategies analyst roles there would be less data compared to DM equities - unless this was a reference to what PMs would use in their role.
Yeah I didn't mean that coding was a pre-requisite for fundamental strategies analyst roles in EM equities today. If you have the languages skills already fair enough, but if you don't and are looking for something to "work on" I would choose that over a new language- think of all the new data you can get on shipping, counting cars in a parking lot, level of fill for oil storage tanks etc. Of course this assumes your standard analyst skills are already top notch!
Also meant to add on your other Q- bigger firms have more resources etc i.e. maybe in country folks, but this is not always better for you because you become more of a cog in the machine rather than the "go to." For example you think JPM AM is sweating over a LATAM focused analyst leaving?
Ah ok makes sense on coding, even in SS we're starting to put a lot more emphasis on this (although varies a lot depending on how traditional the analyst is). Again thanks for the answer, really useful stuff!
By AuM at least, the EM landscape is dominated by large managers such as Lazard, Standard Life Aberdeen, Neuberger, Investec, Templeton, to name a few. There are some EM boutiques that have very successful strategies, but by nature their headcount and thus job openings will be fewer.
There isn't a clear path to working at an EM fund because it's such a niche area. The bigger hurdle is moving from SS to buy side and that's what you should focus on. To the extent you cover EM equities or debt it would definitely help though. For example, you mentioned that you cover EMEA - if you cover Russian, Middle East, or South African debt or equities that would help your resume stand out. You would also presumably be working with EM managers that cover the same, which could help you network your way into a position.
Chinese is by far the most in-demand right now especially with the opening up of the A-share market. Spanish would also be useful and by far the easiest to learn. The execs and IR at Indian companies all speak English so that's not a barrier. China is the only country where I've found the language barrier to be a real challenge, especially with the mainland companies.
Unless you have a huge amount of time to learn and become fluent in a new language, it's probably not the best use of your time. You really need to be fluent otherwise it's not particularly useful. It's not like going on vacation to a country where knowing a few basics goes a long way. You need to be able to conduct the entire meeting in the language and at a high level.
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