Brinson Partners Inc., a pioneer in global investing, could start offering emerging markets investments this year, said Gary P. Brinson, chief investment officer.
"We're looking at both equity and debt," he said, in Latin American, Asian and Eastern European markets.
The firm is in the 15th month of a massive research project into emerging markets.
"The difficulty is getting fundamental data on returns and risk and the relation to the economy," said Mr. Brinson, whose Chicago-based firm become a unit of Swiss Bank Corp., Basle, last year.
Despite the increasingly popular appeal of emerging markets, Mr. Brinson said he has been uncomfortable with the quality of data on the securities, markets and economies in the countries. As a result, the firm has invested none of its now $13 billion in global portfolios in emerging markets, even though the Brinson firm has invested internationally for 15 years.
Illustrating his caution, Mr. Brinson cited the frequent incongruity between the market behavior and the economic fundamentals, using Taiwan as one example. In 1989, its market index was around 12000. Yet by last year it fell to the 6000s, even though all of the fundamental economic data have been strong over those five years. The problem with Taiwan and often other emerging markets, he said, is that frenzied speculation drives the markets to unsustainable overvaluations, making it difficult to price based on economic fundamentals.
He said his firm hopes to offer emerging markets portfolios sometime this year.