Trends Watch: Investing in Emerging and Frontier Markets Technology

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Kevin Carter, Founder & Chief Investment Officer, EMQQ Global.

What is your outlook for investing in emerging and frontier markets technology?

The outlook is quite strong, especially for the internet and e-commerce sector that we invest in.  There are three megatrends that have combined to form a great confluence:  billions of new consumers, increasing smartphone penetration, and higher internet access. E-commerce and smartphone penetration in many of our core markets are still very low compared to developed markets like the U.S. and Europe. Meanwhile billions of people in emerging markets will get their first smartphone in years to come. It’s a tremendous opportunity and it’s still in the early innings. 

Where do you see the greatest opportunities and why?

India.  The India opportunity is unlike any other before and there really can’t be another country like it -- at least in my lifetime.  It is the “perfect emerging market.” It’s recently overtaken China to become the world’s largest population. It has the world’s largest pool of engineering and tech talent. And it’s developed a digital public infrastructure called the “India Stack” that’s helped drive a boom in digital payments and e-commerce. What’s coming along with that are $12 smartphones, which are bringing huge portions of the population online for the first time.

What are the greatest challenges you face and why?

Inertia.  Most investors simply “buy the index,” which for emerging markets is the MSCI EM Index that most ETFs track.  It’s just “easier” for investors to do.  But the index has a lot of flaws and the challenge is to show investors that there is a better way to invest in emerging markets. The growth in emerging markets is really in the more technology-enabled sectors and our challenge is to help steer investors in that direction.

What keeps you up at night?

Geopolitical fears. The world is becoming more fragmented, and tensions are rising by the day. There is even increasing talk of “deglobalization.” Still within that, there are opportunities. Certain countries and markets seem to be benefiting from these global rifts. India, long-term, certainly seems to be one of those markets.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.