Emerging markets expert leaves Excel

In the second major development in emerging markets money management in less than two months, veteran money manager Gavin Graham has left his contractual arrangement as Global Strategist with Toronto-based Excel Funds Management, effective today.

In January, Graham’s former employers at Toronto-based BMO Financial acquired Hong Kong-based Lloyd George Management and heralded the acquisition’s potential contribution to its emerging markets capability. That company, founded by Robert Lloyd George – grandson of David Lloyd George, British Prime Minister during World War I – brought US$ 6 billion in emerging markets assets under management into BMO.

Graham, a long-time proponent of emerging markets investing, had joined Excel Funds in March 2010 after leaving his position as Director of Investments at BMO Asset Management on December 31st 2009. He had joined BMO when it acquired the Guardian Group of Funds in July 2001. At Excel Funds, his role focused on road shows and conferences with advisors which proved exceptionally demanding.

“I basically found I wasn’t able to devote the amount of time and attention needed to be in the ongoing role,” he told Advisor.ca.

Graham intends to continue his activities in emerging markets money management and points to generally better economic fundamentals in some of these economies than in many developed economies including the United States. These fundamentals include trade surpluses, better foreign exchange reserves and stronger financial positions than most developed economies. As he sees things, the recent tumult in the Middle East does not present a long term threat to potential emerging market yields and that the disintegration of several autocratic regimes may make these markets more appealing to investors over time.

These developments and other possible moves being discussed privately in Toronto meetings may point to a trend in the making that will result in a changing landscape in emerging markets money management as players and assets move around. That would reflect the pressures on this segment of the mutual fund sector as expectations for this type of investing and the emphasis on its place in investor portfolios continue increasing while the costs and complexity of expertise increase, given the need for on-the-ground expertise in these economies.

“It’s reasonable to believe that there will be further movement in the emerging market space,” says Graham. With few exceptions such as Patricia Perez-Coutts who manages the AGF Emerging Markets Funds, money managers specializing in emerging markets funds tend to be outside managers hired on contract.