Background
RBG Global has an ongoing engagement with an institutional investment manager focusing on emerging and frontier markets. RBG Global is helping the client incorporate country risk management strategies into its country allocation and research processes by implementing a system for assessing geopolitical risks and strategies for managing exposures.
Action
After learning about the asset manager’s strategy for evaluating investment climates in host countries, RBG developed a process assessing and predicting the impact of political and regulatory decisions on business climates in different countries. The system comprises two important parts: 1) scoring system for existing levels of political stability in host countries and a 2) framework for assessing future political developments in host countries and their impact on investment climates.
Result
With a framework for assessing political and regulatory risks, the client now invests in a broader range of asset classes, implements a dynamic system for managing risk allocation in emerging and frontier markets, and uses a nuanced system for measuring individual investment contexts.