Pioneer Group Inc. has been exploring the globe lately.
The Boston-based firm, which manages about $12 billion, recently became the first foreign investor to receive permission from Czech authorities to start a $50 million domestic mutual fund for Czech investors. The fund will invest in securities of listed companies, but up to half may be invested outside the country.
Earlier this year, the once-staid mutual fund company also became the first foreign money manager to purchase a majority interest in a Russian voucher fund, the First Investment Voucher Fund. In the early stages of privatization, all Russians were given vouchers as their share of ownership in various state-owned enterprises. Voucher funds in turn manage those holdings.
In 1992 the firm took its pioneering spirit to Poland, where it set up the first open-end mutual fund, modeled on American mutual funds, to invest in Polish securities.
The following year, Pioneer became the first American money management firm to launch open-ended mutual funds in India for domestic investors through ITI Pioneer AMC Ltd., its Madras, India, joint venture with the Investment Trust of India.
And sometime this summer the money management firm hopes to raise $100 million from American and European institutional investors for the first venture capital fund to invest in private Russian companies or state-owned enterprises being privatized.
The company also is working to set up a $75 million to $100 million institutional fund that will invest in securities of publicly traded Russian companies.
Pioneer also hopes to launch a venture capital fund in the fall, giving institutional investors access to young and fast-growing companies in India.
Pioneer also sees opportunities in Taiwan, a more mature economy than the other Asian and Central European economies, but "on the verge of rekindling a lot of peoples' imaginations as a hot growth market," said David D. Tripple, Pioneer's chief investment officer.
Apart from emerging markets, the company also hopes to tap into the growing market for mutual funds in Europe, especially Germany, through an office it set up earlier this year in Ireland.
Pioneer seeks to differentiate itself from others by first setting up domestic funds in various markets and then parlaying its expertise into funds aimed at American and European institutions.
The trick, says Mr. Tripple, is to beat the crowd.
"If you are in early and get that instinctive reaction that being in (that particular market) is crazy, you can make great returns," he noted.
"Pioneer's view is to look at places..... currently viewed as risky but where the expectations of long-term returns are much higher than returns in the U.S.," he says.
But there's a difference between taking calculated risks and sheer bravado. Which is why Pioneer carefully picks only those emerging markets that can sustain high economic growth over many years - five or more - he said.