Nepal, Mongolia, Burma, Cambodia – Frontier Markets with Massive Investment Potential

Chris and I spend the majority of our time researching and  investing in frontier markets. We make it a point to get to know the folks that are on the ground making capital allocation decisions in places like Nepal, Mongolia, Burma, Cambodia, Sri Lanka, Uruguay, West Africa and Fiji.

Over the last couple years we’ve developed relationships with guys like Harris Kupperman from Mongolia Growth Group. As most of you probably know by now Harris and his partner Jordan Calonego run one of our favourite Mongolian ventures (C:YAK, MNGGF). Their focus is on real estate and insurance, two areas that will explode with the influx of capital that is pouring into the country. We wrote that Mongolia will be the richest place in the world per capita in 10 years. Because of our thesis, we’ve participated in every private placement round YAK has offered thus far. If you missed the first three there’s another one occurring as I write this.

Nepal is another favourite of mine, and definitely a frontier market worth exploring. I was introduced to an expert in run of river hydropower a few years ago, when I was looking to help a Vietnamese firm execute on a project. Run of river is much more environmentally benign than traditional “dam” hydro, where they end up flooding entire valleys or ecosystems. I ran an interview with the CEO of GRID, a company dedicated to bringing run of river hydropower projects to fruition in Nepal. It turns out the country is perfect for the technology, and can sell the power it doesn’t consume into the Indian grid. I’m a seed investor in the deal, and I expect it to be very rewarding.

Several of our readers have written to us about Burma as well. Chris recently talked about the best trades and investments – 2012, in which he highlighted Burma. Famed investor Jim Rogers recently said that if he could invest in Burma he’d never have to invest again. He expects a 20-year run there that will rival China’s growth. Unfortunately Americans cannot access this market at present. My partner Chris first went to Burma 12 years ago and loved it. He’s currently speaking to a couple guys (some we met from this site) and trying to figure out ways to play it. Investing in the world’s longest-running civil war might just make us a lot of money!

Then there’s Cambodia… Our friend Simon Black from Sovereignman.com got us in touch with Douglas Clayton, a fund manager who specializes in emerging and frontier market investing. He runs the Leopard Cambodia Fund, LP. It’s a country that’s flown largely under the radar of most investors, yet the performance has been spectacular, and looks to increase as foreign direct investment continues to pour in. Douglas is putting together other funds as well, all focusing on specific frontier markets. We’ll talk more about these in the future, and we’ll likely have an interview with Douglas shortly.

Over in Uruguay, where I spend a lot of my time, I recently met with a guy from Botswana whose convinced that Uruguay’s mineral wealth has yet to be uncovered. He has a pretty good track record of finding valuable rocks in his native Botswana, where he’s in the process of building a pretty impressive diamond company. However he lives in Uruguay now, and plans to continue exploring concessions he’s locking up the rights to. Uruguay also has a lot of valuable agricultural land and it’s primed to benefit from the coming food crisis.

Chris has made some investments in Fiji, and it remains a favourite destination of his for a little R&R. The diving is spectacular, but there’s more to Fiji than white sands and tropical reef. Our friend Carlos Andres informs me that he’s writing up a company that’s mining in Fiji for his readers this month. The gold grades look spectacular, and he’s really excited about it. We’ve interviewed Carlos several times in this site, and he’s considered a “friend of CapEx“. You all know by now that Chris and I like resource stock investing, the returns can be spectacular. However we don’t go it alone. We keep guys like Carlos close to us and rely on their expertise.

Vietnam, Thailand, Laos, Namibia, Tunisia, Zimbabwe, Cuba, Chile, Peru, Colombia… These are just a few more places we are either involved in, or where we have our feelers out looking for opportunities.

We’ve now posted 110 articles to this site. We’re happy to announce that we recently inked a deal with a well-known Internet publishing group to expand our universe of readers exponentially. We’re also getting more involved with a group of guys we invested into a technology venture with several months ago. The idea is an incubator of sorts, where we’ll help startups in the tech space access resources and capital. In exchange we’ll get a slice of some of the best ones. In other words, we’re not standing still. Neither should you.

The world can be a scary and depressing place. We choose to sidestep the smokescreen of global mayhem and avoid the media-induced coma that most in the Western World seem to find themselves in. We’re excited about the opportunities we see and the ability to share them with you.

Over the next few months we’ll be talking more and more with the folks making things happen. More interviews, more on-the-ground intelligence and more opportunities for our readers.

Oh, by the way, if you’re an accredited investor drop us a line and let us know. We have something up our sleeves for those that are qualified to get involved in private placements, early round deals and highly-speculative opportunities.

Meanwhile, if your interested in Nepalese run of river hydropower, Mongolian real estate or Cambodian equities drop us a line and we’ll get you in touch with some interesting people doing very interesting things!

Thanks for reading!

- Mark

“There has to be this pioneer, the individual who has the courage, the ambition to overcome the obstacles that always develop when one tries to do something worthwhile, especially when it is new and different.” – Alfred P. Sloan