What is frontier investing? Whilst there is no hard and fast definition, it is generally a step up the risk curve from investing in emerging countries such as Brazil, Russia, India or China. The philosophy behind frontier investing is to find countries which are considered to be on the right track to one day being an emerging country, which comprises of many factors – political, economic, population, resources, geographic positioning, etc but for most people they might be currently too small, illiquid or risky to invest in.
Kiyan Zandiyeh is the CIO at Sturgeon Capital, a specialist frontier investment house which focuses on investing in Uzbekistan & other Central Asian nations. This podcast provides insights into their investment process, where they prioritise their local presence on the ground within these markets and are focused on bringing business ideas that have worked elsewhere and applying them to the these frontier markets.
Unsurprisingly Sturgeon Capital’s minimum return hurdles are very high to match the investment risk. Kiyan believes the key to success is not to apply new thinking or management to an existing hard asset business such as manufacturing, mining and infrastructure (which can only improve so far), but rather to create and invest in intangible value companies such as technology and software companies which have more scalability.