James Caan, the chairman of Insynergy Investment Management and Dragons’ Den panelist, caused controversy at a conference today by claiming that investors were reluctant to move into emerging markets.
Guest speaker Caan spoke confidently about the potential of the Indian markets to conference attendees, going as far as to say that the last 10-15 years of growth that India has enjoyed may just be the beginning.
Caan seemed to deny that there was mass interest in emerging markets
As he elaborated on his approach to investments, Caan drew parallels between his strategy and that of American investor Warren Buffett, which he says is to sell assets as soon as they reach a price they would pay for them.
Caan summarised this strategy by saying a heightened interest in a particular area of investment would lead to unsustainable demand. The best approach was to focus on undervalued areas such as India, he says, in which Insynergy invests through its Absolute India fund. (article continues below)
However, during a question and answer session, Caan was asked how he reconciled this approach with the extremely high demand emerging markets, including India, seemed to be experiencing. Caan seemed to deny that there was mass interest in emerging markets and said there was a ‘reluctance’ among investors to move in.
Many emerging market currencies and stocks are seen as entering ‘bubble territory’ after massive inflows, which have led to well publicised capital controls in countries like Brazil.
Emerging market funds attracted almost half of total inflows into exchange traded funds in October as the popularity of global emerging markets rose further.
Global Emerging Markets was also the most popular IMA sector in November, attracting inflows of £337m.