This is not the case for Sonal Tanna, lead manager on the JPM Africa Equity and JPM Emerging Middle East Equity funds, who seems to have found her niche.
“I just really enjoy investing so I’ll find interesting opportunities whatever market I am looking at. I think the interesting thing about emerging markets is how new technology and processes mean the path that developed markets followed will not replicate itself exactly. Even though you might end up at a similar point in the future, the route there will be quite different. It is quite interesting to see how technology is changing that quite rapidly.”
Although she studied economics at university – a subject she describes as “more theoretical than what we do day-to-day” – she was very clear that she wanted to work in the financial services industry. “What I’m quite attracted to is the fact that the results of what you do are quite visible in this industry. I’m interested generally in how companies operate – I’ve always been interested in that so it was one of the attractions.”
Ms Tanna applied to the graduate programme at what was then Flemings and became an emerging markets analyst.
“It had a position in the equity side in the emerging markets team and today I’m still in the same team. Even though the firm has changed names and we’ve had joiners and leavers, actually quite a lot of the people I started with are still here, which is great and I think we have retained our own team culture.”
She points out that with such a large number of people covering different markets, there is no ‘star culture’ – it is very much a team dynamic. “With such a big team you would either be working in silos on your own project, or you would be interacting – it’s the nature of the job. But there is no star culture here; it is more of team dynamic.”
Originally spending a number of years covering the South African market as an analyst, Ms Tanna got her first taste of managing money when changes in the emerging market asset class meant the country started to get more attention.
“We started looking a lot more at South Africa being a part of our offering within emerging Europe, making it more of an EMEA [Europe, Middle East and Africa] fund. It had a better fit with EMEA, even though a lot of the dynamics were previously determined by global emerging markets.”
When JPMorgan decided to incorporate South Africa more closely into the EMEA process, Ms Tanna started working with the portfolio manager, eventually becoming co-manager on the JPM Emerging Europe, Middle East and Africa Equity fund in 2007.
She adds: “That was my first taste of managing money rather than looking directly at company analysis. I realised I quite enjoyed it and it went from there. Subsequently, I developed more of a niche further north into the rest of Africa, the Middle East and Turkey, but we’ve now reached a stage where we overlap into each other’s markets.”
As a first step on the fund manager ladder, running money in a relatively niche market could have caused a degree of nervousness.
“Yes, it is a sense of responsibility that you are not accustomed to, but I found it fascinating as it is also the element of thinking about risk adjusted returns, but at a step up from company level.
“You are thinking about it from a portfolio level and trying to gauge at a portfolio or market level what is priced in and what is not. There is that sense of responsibility and a certain level of stress that does come with it, but it is very exciting at the same time.”
With such emerging countries, there are perhaps slightly different challenges than those faced by investors in more developed markets.
The manager explains: “The biggest challenge is working with companies and making sure they understand you are long-term partners, as we tend to be fairly long-term investors. However, for a lot of emerging markets, particularly frontier markets, their interaction with equity investors – and particularly institutional equity investors – tends to be fairly limited and that can be quite a challenge.
“So we have gone through a period of not getting company meetings, to not getting the right level of interaction, to really having to work your way through and build up a relationship with companies.
“Working with them is getting easier than it used to be, but it remains a challenge, particularly in the more frontier end of the spectrum.”
Starting as a portfolio manager with the JPM Emerging Europe, Middle East and Africa Equity fund, Ms Tanna has added the JPM Emerging Middle East Equity and JPM Africa Equity funds to her list. But it is clear that her initial interest in the region has increased over the years rather than faded.
She notes: “In emerging markets, you do have a lot more on-the-ground research that you need to do because it is a different investor base. So you are travelling in those regions and meeting companies that have been successful in their own right, in circumstances that would be very different even to the mainstream emerging markets.
“For example, there are companies that trade and flourish while political dynamics are quite different, which manage to navigate through civil wars, different governments, currency restrictions, import restrictions and so on. So the market is always evolving and that’s what we see as quite interesting.”
Africa remains a key area of interest for the manager, particularly with regard to potential opportunities in markets such as Nigeria and Kenya, where there is underlying development in companies that are not yet in the listed equity space.
“You can see that as they look to get to the next level of growth they’ll need to find alternative methods of funding.
“Coming to market will be one of those options, so you can see that needs to come through in these regions,” she adds.
She recognises that there are likely to be further social, economic and political changes in some of the markets in her remit in the years to come, but that will make for exciting work, she says.
“The big sea change that will happen is if – and when – Saudi Arabia is opened up to international investors because that is a huge market. It is also a country that is a lot more diversified than the rest of the Gulf in terms of the population, which includes a fairly sizable middle class.
“At one stage, we used to be big investors in Egypt, which has obviously been through a few years of turbulent changes, but with the stages of development that economy could eventually go through, the potential is immense when things settle down.”
The manager’s enthusiasm for her region is infectious and in spite of having worked across the sector for a number of years, the part of the job she enjoys the most is still when she meets interesting new companies.
She explains: “The best thing about the job is when you meet with a company that you think will be really exciting: that in this particular company the management knows what they are doing and from an investment perspective you could be investing today and still be growing with this company in 10 years’ time.
“You do not find a lot of these to be honest, but when you can it is great and that’s when I realise that this is what I really love about my job.”
