Fund Objective & Investment Strategy

Balkan Emerging Frontiers is a regulated fund focused on the stock markets of the Western Balkans (countries of former Yugoslavia), which have huge potential. Regional stock markets are uncorrelated with global markets. They are still very inefficient and there are plenty of investment opportunities available.

There is tremendous short term growth potential in Western Balkans capital markets, asregional stock exchange indices are still very depressed. They have not improved much since decrease and are lagging the most behind the world indices, some of them are atonly 10% of 2007’s highs.

In the mid to long term perspective these countries have the largest growth potential in Europe. Effects of the upcoming EU accession will converge regional economies andvaluations to that of existing EU member states. That will be the last enlargement of the European Union and the last catch up story in Europe, in foreseeable future.

Fund’s objective is to provide investors with a net return series that over multiple years exceeds that of the major developed, emerging, frontier & local indices.

We use bottom-up fundamental analysis and investment picking investment approaches. We exploit pricing inefficiencies. With good understanding and experience in investing we are able to avoid most of the countries and companies specific risks. We are investing exclusively in publicly traded securities.

Our primary risk mitigation tool is diversification. We have imposed position limits for countries, industries and companies; the exact portion of allocation to individual countries however depends on regional macro economical factors.

The Investment Manager has 19 years of valuable experience in investing and managing investments in the region, almost from the start of the privatization process. We have excellent contacts in the region, and so we are capable to access and evaluate information quickly in order to exploit investment opportunities by active management.