Time flies! It’s been eight years since we launched our independent investment audit service to empower emerging managers overcome LPs’ reluctance to commit upfront their valuable time and often constrained resources to conduct a deep-dive due diligence on emerging managers. We take this opportunity to thank all GPs who gave us the opportunity to audit their funds/strategies and their LPs for leveraging our investment audit aka due diligence, to inform their investment commitments.

As we mark our eight-year anniversary we reflect upon all our market observations over time that we factored into our investment audit framework. Despite a new world order in the making, both economically and geopolitically, what we find is that many of our musings (listed below) from our library of blogs called “Ideas Lab” hold true even today. We are no market pundits (the world could easily do with one less) but summarize our past observations, many of which continue to deserve serious consideration in almost all our investment audits in evaluating various strategies and managers.

Observations/Due Diligence Considerations: Relevant Now as Then	Ideas Lab Blog	Date Published
Through the Macro Lens …trade restrictions could expedite the transformation from globalization to localization. Coalescing around each other is only likely to boost intra-EM trade buoyed by both vast consuming populations (namely China, India, ASEAN) and infrastructure needs.	Trading Trade Wars	May 23, 2018
As trade wars and tariffs that once seemed unimaginable have now become the “greatest” living truth, investors need to brace for the unimaginable. How a GP is positioned competitively to generate trades/originate deals, execute nimbly, and manage “risk” (including “geopolitics”) proactively, will matter more than ever before.	EM’s DM Risks	Jul 25, 2018
Investors either shun regions/countries altogether or flock in droves mesmerized by political leaders. …evaluate each individual policy announcement from these leaders for any potential opportunity or risk on the horizon	Elect-Shuns!	Jun 4, 2019
There is no denying that the US has been transmitting seismic waves across the globe triggered by a new fear-factor every day to the point that it has swapped roles with EM as a bedrock of troubles, anxiety and uncertainty The developing world is trying to insulate itself from external forces to the best it can by chalking out its own future by nurturing local economies across multiple dimensions-consumers, infrastructure, businesses, financial and capital market reforms, healthcare, education and of course technological innovation. In other words, EM is preparing to pack a punch for the future! …will re-configured supply chains closer to consumers, deprived of comparative cost advantages of globalization drive costs higher? A normal economic cycle disrupted, will monetary policy makers lean deflationary or inflationary and what would it mean for asset owners’ asset allocations?	EM: WeAct	Sept 25, 2019
financial asset prices would no longer be restricted to just plain underlying economics, but investors would also need to be acutely aware of geopolitics, public policy, and societal concerns.	The Big Reset	Dec 17, 2020
past is no longer prologue for a new investing era …investors need to evaluate all investments in a multi-dimensional framework to understand the various moving parts in an era of growing uncertainty. …get down to the individual deal/transaction level to understand the source of a manager’s alpha/premium, its sustainability, and verify if consistent and adaptable processes are adopted to mine the alpha. For investors, it begs to look closely at general partners’ assumptions, pricing metrics for establishing new positions, especially when past track-records/vintages become less indicative in a new investment paradigm where many businesses are likely to change radically.	Please Worry, Don’t be Happy: Private Markets Due Diligence in a New Era	Mar 3, 2021
China’s Ascendance With erstwhile global powers take a backseat of their own volition or because of their diminishing clout, new leaders are surfacing on the world-stage who are trying to feed their nationalist agendas by consolidating their power both regionally and globally. China, once again, is an easy guess.	Present Value of Poli-tech	Sept 28, 2017
It may be too hot in China’s kitchen as Master Chef Xi Jinping and his sous-chefs are trying hard to cook a palatable response to US demands on trade, business, and global politics. In understanding the emerging recipes of China’s foreign policies, it’s important to understand the strategic vision and domestic imperatives of China’s leadership. Already the second largest economy, China is growing (despite threats of a slowdown) three times as fast as the US, on track to become the largest economic power globally, over time. What follows is political heft with the ability to influence global politics by attracting international support. … there is no denying that China is out to leapfrog the West with innovations in e-commerce, biotechnology, semi-conductors, and artificial intelligence by creating national technology champions. “accelerate R&D and investments” in semi-conductors and the like by a concerted action between the government and leading corporates. So perhaps what was targeted in 5-10 years, will now be aimed for in 4-7 years to achieve self-sufficiency in semi-conductors.	A Chinese Menu for China	Apr 16, 2018
There is more to China than its mere 3.6% representation in the MSCI ACWI that we just cannot afford to miss out on!	No China For You!	Oct 31, 2019
would every business and investment decision, no matter where the underlying might be located, warrant an analysis from a “China, what-if” angle?	Zooming Past Covid-19	Apr 16, 2020
…state capitalism will continue to challenge the democratic order of the West and Xi Power could potentially shape global outcomes in years to come	The Big Reset	Dec 17, 2020
it is imperative first and foremost to understand the cycles of change in the “New China” and “not merely extrapolate the past or current policies into the future” that many investors mistakenly do.	Rediscovering Zeal for a New China	Dec 8,  2021
But banking on one of China’s key objectives (i.e., Xi Jinping’s signature policy reforms, more pertinently) of “de-risking and deleveraging” affords an idiosyncratic opportunity.	Cashing in on a New China	Nov 9, 2022
India’s Arrived! …aspirations reign high of the teeming millions striving for a better India, a modern India. For investors, it is a wake-up call to profit from the making of a new India.	India: Wake Up and Smell the Chai	Oct 10, 2018
India, the largest democracy of 1.4 billion people ought to be recognized for its exceptionalism in becoming the fifth largest economy (ranked ninth a decade ago) notwithstanding economic disparities of gargantuan proportions and unparalleled diversity across cultures, languages, customs/traditions/social practices, food habits, religious beliefs and much more than one can succinctly summarize. … global investors who recognize that India is too important (on multiple dimensions) to ignore, cannot just bet on one man (Modi) to ride the India bull wave but would need to monitor local Indian politics like probably nowhere else.	Indian Exceptionalism	Jun 7,  2024
Getting Real with Real Assets … tariffs make it more expensive to build roads, bridges, schools, health centers, energy pipelines, etc. Public spending in infrastructure in the developed world, particularly EU, is already on a downtrend since 2008 mainly due to a decrease in capex by subnational governments (regional and local), that are responsible for on average 60% of public investment in the OECD.  One would therefore expect the declining role of governments to pave the way for private sector to play a crucial role in bridging the gap.	Infrastructure Investing: Your Lasting Impact on EM and Portfolios	Mar 13, 2018
…gains from real-economy assets that afford more upfront contractual current income/yield are more attractive than uncertain capital appreciation. In this regard,(asset-based) lending to sectors linked to the real economy (e.g. real/hard assets, commodity-driven, etc.) offer a differentiated and less correlated return stream, and premium over, over-crowded direct lending options available to US institutional investors.	Real Solutions in Real Economy for Real Money	Nov 15, 2018
Growth opportunities through innovation are also likely to manifest in the real economy, in the form of ecommerce warehouses, digital farms, freezer farms, ghost kitchens, bio-tech labs, Hollywood studios for streaming content providers (e.g. Netflix, Amazon Prime), etc.	The Big Reset	Dec 17, 2020
Sustaining Sustainability …labor issues, gender inequality, social inequality, diversity, human rights, health, education, etc., all deserving social causes that need to be fixed as well as risk-managed … beyond risk management of social issues, it becomes an avenue for tapping into gains… in blended finance private investors can invest with Development Finance Institutions who provide the first-loss capital (or risk guarantees) for sustainability projects	Environment for Social Gains	Mar 11, 2020
… address global structural issues across environmental, social, and economic dimensions (as in UN Sustainable Development Goals) in return for complexity, illiquidity and inefficiency premiums, through impact investments …pricing climate-related risks and opportunities correctly is now deemed as important as assessing financial conditions of businesses …equity investors are likely short-changed if they cannot accurately price how sustainability issues and negative externalities (unpriced social costs) specific to a business, impact its value creation. By the same token, lenders could be handicapped in their credit (pricing) assessment of a business’s risk of default and loss-severity.	Sustaining Sustainability	May 25, 2023
growing awareness and recognition of sustainability considerations, and evolving taxonomies, regulations and standards are pursued to achieve environmental and social goals, opening potential opportunities for those alternative investors who are willing to stretch their imaginations and adapt their capabilities.	Sustainable Alternatives	Jun 20, 2023
Seeking the “Private” in Private Debt …when middle-market lending in developed markets is looking over-stretched, it would pay to seek the real “private” in private debt markets where Asia given its size and prominence across small businesses, consumers and trade carries a special appeal. The appeal is stronger when stability and visibility of cash flows offer safer harbors in an evolving climate for increased stress.	The “Private” in Private Debt	Oct 18, 2017
…valuation becomes the most important driver of any asset’s return as it marks the starting point for any investor. …stressed and distressed strategies with either a trading or a workout/restructuring bent could have their moment in the sun. To profit from constrained liquidity, investors could act as liquidity providers lending into stressed situations at a premium.	Vision 20-20 for Some Inconvenient Truths	Dec 12, 2019
With direct lending yields compressed to mid-single digits, leverage levels escalating, covenant-lite rising and deal origination trapped in over-crowdedness, the new game in town is multisector private capital. How is private debt (across performing to stress to distress) going to be priced when business models are upended, supply chains distorted and liquidation valuations of collateral rapidly becoming a guessing game?	Zooming Past Covid-19	Apr16, 2020
Attractive that the opportunity is, it also poses huge barriers to entry… Asia direct lending is “less mature” affording rich premiums	Zeroing in on a New Bridge to Direct Lending in Asia-Pacific	Sept 26, 2022
the key question before institutional investors is whether they should seek complexity to generate steady returns in familiar but oversaturated (in both dollars and number of managers) markets of US /Europe facing all-round uncertainty, or should they pursue differentiated/less-correlated streams of predictable returns in less-trafficked regions of the world.	Finding The True “Private” in Private Credit	Feb 19, 2025
Volatility-Par for the Course …stars are aligning for increased volatility ahead, creating a lucrative atmosphere for fundamentally driven, trading-oriented, strategies- Hedged equities and a relative value approach across asset classes	VOL: LOV ‘EM	Feb 13, 2018

Even if the past seems like prologue, this time around the world is changing both economically and geopolitically. Cash is a comforting safe harbor with ~4% yields. Fiscal deficits is the new order of the day and through first and second order effects, foretell a higher- for- longer interest rate regime in sharp contrast to the lower-for- longer mantra of the zero/low interest era post the GFC. What it also means is that with decent cash/reference-rates, investors will ask “am I being fairly compensated for any additional risk?” This poses challenges for sponsored lending (private credit’s mainstay) in US/Europe thus warranting pursuits for differentiated/less-correlated streams of predictable returns in less capitalized strategies or less trafficked regions of the world. Therefore, uncorrelated income streams from real asset-based lending (real estate and infrastructure), capital-solutions, non-sponsored direct lending (away from over-saturated sponsored lending) appear attractive.

At the same time, the dollar seems to be defying rising yields and is threatened with losing its pre-eminent status as the world’s reserve currency (though unlikely anytime soon) making Asian equities (buoyed by intra-Asia trade and domestic consumption) and unhedged local currency bonds and private credit attractive. Impending decline of cross-border capital flows and trade would deal yet another blow to American exceptionalism warranting global diversification across all asset-classes, public and private that inadvertently  benefits from less correlated markets. And of course, AI is powering the fourth industrial revolution and reshaping global  economies which is likely to create market dispersion i.e. winners and losers to the advantage of investors.

Also, now the world is mired in more armed conflicts in Europe, Middle-East and South Asia. Europe is catalyzed and galvanized to get its act together toward greater self-sufficiency be it its defense (against a warring Russia) or its economy (threatened by Chinese exports). China remains indispensable in global supply chains (“China’s supply chain is a miracle”, says Jensen Huang, CEO Nvidia) and challenges the US for global hegemony in the new economic order. Despite all odds, India is commanding closer economic and geo-strategic attention. Progressive countries in the Middle-East like Saudi Arabia, UAE, Qatar are aggressively seeking integration into the new world order to diversify their respective economies thus affording both newer investment opportunities as well as pools of capital in contrast to a beleaguered West.

ÊMA continues to remain an avid student of global capital markets with no preconceived notions or biases. We shall continue to audit/diligence every “qualifying” emerging manager crossing our desks from the ground up, with an LP’s perspective. We strive to remain “LPs’ Watchdog”, while we also empower emerging managers solve for LPs.

Yours Truly,

Kamal Suppal

Chief Investment Auditor

July 9, 2025

The above content is intended for sophisticated audiences as in institutional investors or family offices. Readers are advised that any theme or idea discussed above is not an offer to buy or sell any investment.