E327: $7B CIO: The Right Way to Invest in Emerging Markets

The conversation explores strategies for successful investing in emerging markets, challenging the common perception that it's a "trap." Robert Koenigsberger, founder and CIO of a $7 billion fund, argues that the key lies in adopting a high-conviction, active management approach rather than passively tracking indices. He critiques the use of emerging market indices, citing examples like Argentina's 18% weighting before its default and the forced ownership of Russian and Ukrainian assets during the 2022 invasion. Koenigsberger advocates for a barbell strategy, anchoring investments in high-conviction yield and avoiding common behavioral mistakes driven by fear and FOMO. He emphasizes the importance of local teams, thorough underwriting, and prioritizing the character of the people you are lending to, even above jurisdiction and legal structures.