Investing in Hedge Funds, Revised and Updated Edition

CHAPTER 13

Emerging Markets

EMERGING MARKETS STRATEGIES involve primarily long investments in the securities of companies in countries with developing, or emerging, financial markets. Managers make particular use of specialized knowledge and an on-the-ground presence in markets where financial information is often scarce. Such knowledge and presence creates an informational edge that allows them to take advantage of mispricings caused by emerging markets inefficiencies. GLOBAL INVESTORS make profits by mining these markets for undervalued assets and purchasing them before the market corrects itself. Because of the less developed and less liquid nature of these markets, emerging markets securities are generally more volatile than securities traded ...