Why Emerging Markets are Finally Outperforming Developed Markets | Robert Koenigsberger | Gramercy

This episode is sponsored by Pictet Asset Management and its AI-enhanced equity ETFs. Pictet AI Enhanced US Equity ETF (PQUS): https://etf.am.pictet.com/pqus/?utm_campaign=usetf&cid=2826077237&utm_source=jfmv&utm_content=pquslp&utm_medium=podcast_02&utm_term=noterm Pictet AI Enhanced International Equity ETF (PQNT): https://etf.am.pictet.com/pqnt/?utm_campaign=usetf&cid=2715538577&utm_source=jfmv&utm_content=pqnt&utm_medium=podcast_02&utm_term=noterm Emerging market outperformance is turning investors’ heads and in this episode of Other People’s Money, Robert Koenigsberger, CIO and founder of multi-billion dollar EM alternative asset manager Gramercy, explains why the macro environment has emerging markets looking more developed than some developed markets, particularly in how swiftly their central banks acted to combat inflation. He also explains how passive index investing can do damage to an emerging market portfolio and why the typical EM approach focusing on exposure is all wrong. Koenigsberger also dives into the structural advantages of emerging market private credit over its developed market counterparts, emphasizing the importance of local networks, senior secured collateral, and having a positive influence on corporate governance. Follow Robert Koenigsberger on X: https://x.com/GramercyRK Follow Max on X: https://x.com/maxwiethe Follow Other People’s Money on: Apple Podcast https://bit.ly/4e7QJ1M Spotify https://bit.ly/3Yhaazi YouTube https://bit.ly/3C63VXR X https://x.com/opmpod Timestamps: 00:00 Intro 00:36 Pictet AI ETFs 01:54 How EM Investing Evolved 02:48 Why EMs Outperformed 04:08 Debt vs Equity Returns 06:09 Policy Convergence EM vs. DM 08:33 Diversifying Beyond Dollar 11:30 EM Private Credit 14:57 Pictet AI ETFs 16:32 Why Borrowers Choose Private 21:06 Defining EM Alpha 25:23 Index Construction Pitfalls 28:57 True Distress and Asymmetry 33:14 China Property Deep Value 35:15 Picking Winners at Five Cents 38:33 Sovereign Timing Checklist 40:07 Sanctions and “Uninvestibility” 43:37 Structuring Downside Control 44:58 Creditor Groups Collaboration 48:55 Restructuring Deal Template 50:23 Warrants Windfalls Risks 53:19 Governance in Private Credit 59:02 Underwriting People Networks 01:02:43 Hedging Without Shorting 01:05:49 Allocator Case for EM Credit 01:08:40 Liquidity Myths and Cycles