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Investors see pay-off in emerging countries

Jeremy Hobson Jul 16, 2010
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Investors see pay-off in emerging countries

Jeremy Hobson Jul 16, 2010
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TEXT OF STORY

Steve Chiotakis: With the passage of financial reform, employees of the big banks will probably be asking for an extra cocktail at the end of today. But there’s a group of investors raising a glass for a different reason. Marketplace’s Jeremy Hobson reports.


Jeremy Hobson: It’s a warm summer afternoon, and on the roofdeck of a midtown Manhattan highrise, dozens of heavy-duty investors are gathered for happy hour. But this is not your typical Wall Street get-together. It’s a beer tasting at Auerbach Grayson, a firm that invests in emerging countries. Fittingly, the beer selection is heavy on brews from the frontier.

Jon Preizler: I just had my first beer from Indonesia and my second beer from Kenya, so I plan on finishing the menu.

That’s Hedge Fund trader Jon Preizler, one of the firm’s clients.

Preizler: The typical Wall Street dinner or broker dinner is a steak and it’s usually in a stuffy atmosphere with darkwood cherry tables and dim lighting. And this is outside in the sun and this is more about exploring different things and keeping an open mind after a few beers.

Keeping an open mind is what this firm’s business is all about. Convincing clients to put their money in some pretty sketchy places. But the co-founder Jonathan Auerbach says these days, the emerging world is paying off big time.

Jonathan Auerbach: You know the focus is all on the G-20 and what’s the big markets of the world. And for us, the emerging world is contributing growth. It’s 6 percent plus, when the G-20 is under 3 percent on average. And it’s where the value is.

With his trademark open-collar shirt and sharktooth necklace, Auerbach looks like the kind of guy who’d take you on safari. Though today, he’s just trying to get everyone to taste the Kenyan beer, Tusker.

Auerbach: I suppose if you went to another rooftop, you know and they were trying to celebrate the S&P 500 or they were options traders, there might be a few long faces and instead of drinking beer, they’d probably have a couple bottles of Makers Mark and some fancy Scotch out there. But this is a celebration.

Hobson: Things are good on the frontier.

Auerbach: Oh yes.

In New York, I’m Jeremy Hobson for Marketplace.

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