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Sustainable Investing in Emerging Markets – Round Table Insights

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Stockholm (NordSip) – As we enter 2024, the investment landscape in emerging markets defies the notion of “business as usual.” The enduring effects of the COVID-19 pandemic, geopolitical tensions stemming from the Russian invasion of Ukraine, and the humanitarian crisis in Israel have profoundly shaped investor sentiment and practices.

To understand how emerging market investors can continue to direct capital sustainably to the parts of the world that require it the most, NordSip convened six seasoned professionals over lunch on a chilly January day in Stockholm.

Although emerging markets typically evoke heightened awareness of risk, for emerging market specialists, recent global changes don’t necessarily translate to increased risk; instead, they underscore the need for specific skills.

Take, for instance, a large asset owner like AP3: recent geopolitical turmoil necessitated a reassessment of the fund’s global allocation. Their team’s methodology resulted in a country ranking based on relative risks, ultimately leading to China’s exclusion. Similarly, other investors, including a sovereign debt manager at Ninety One and a listed equity manager at Premier Miton, also rely on country rankings. On the other hand, for a private debt investor at Cardano, geographical choices are intrinsically linked to having “boots on the ground.”

What our investor group unanimously agrees upon are the tremendous opportunities inherent in engaging with companies and, in some cases, even with governments. Whether it is communicating with management to obtain reliable data or dictating more stringent terms for refinancing (linked, for example, to environmental targets), investors wield a wide array of tools to affect change.

Download the report here of flip below.

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Aline Reichenberg Gustafsson, CFA
Aline Reichenberg Gustafsson, CFA
Aline Reichenberg Gustafsson, CFA is Editor-in-Chief of HedgeNordic.com and NordSIP.com. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.

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