Investing in Emerging Markets



57 Starts has its headquarters in Washington DC's Chinatown.

This Friday afternoon, I met with 57 Stars’ vice president Carl Balit. According to Mr. Balit, the role of the company 57 Stars is to “manage people’s capital”, which means that the company takes money and puts it in investing opportunities around the world. However, 57 Stars’ focus is investing in private companies. By the term “private companies” Mr. Balit means that the ownership of the companies 57 Stars invests in is held amongst small groups of people.

57 Stars mostly invests in countries outside of North America and Europe. The major countries that 57 Stars is investing in right now are the BRICs (Brazil, Russia, India, and China). According to Mr. Balit the reason they chose those countries is because it is more likely that those will “dominate the world” financially in the future. As Mr. Balit said, “we invest really for the long term.” Besides the BRICs, 57 Stars also invests in other developing nations, including Nigeria, Egypt, South Africa, Columbia and Peru.

Mr. Balit has lots of concerns about starting businesses in third world countries for a number of reasons. The difficulty of starting a business in poorer countries “really depends on case by case basis, ” he said. For instance, in some countries it is “literally is impossible to start a business.” Mr. Balit said this is because of what they call “red tape,” meaning procedures that have to be followed despite being a waste of time. Also, in a lot of these countries, the infrastructure is not reliable. In a nutshell, many of the things that define the term ‘third world’ are the obstacles to successfully creating businesses in these countries.