A man who oversees a portfolio of investments in emerging economies was commenting on the criticisms he gets about the “hot money” he manages, when he put things in perspective.Karim Abdel-Motaal, a top portfolio manager at GLG (now a part of the huge hedge fund Man Group), was speaking to FTAlphaville about how some leaders of emerging market economies have tried to prevent so-called speculative “hot money” from flowing into their countries from international investors (like hedge funds) with his partner Bart Turtelboom.
The criticism is that when “hot money” flows into an EM, it boosts the value of the country’s currency and damages its export business, according to FTAlphaville. And then, if the country hits a crisis, it flows out quickly, putting the country at risk of a default. So it hurts coming in and hurts more going out.
First of all, says Abdel-Motaal, that criticism stems from an exaggeration that most of the money coming in to emerging markets is “hot money.” A lot of it comes from FDI (foreign direct investment, aka, long term investment by country A into country B) too.
And about that term they’re calling it, “hot money…”
“It ain’t less hot than I am.”
Of course if he meant what we think he meant (to say more, not less), he was joking, but there’s no need for him to be modest. Abdel-Motaal is an animal.
A snapshot of his resume:
- Global Co-Head of Emerging Markets at Morgan Stanley
- Portfolio Manager at Tudor Management, emerging markets
- Global Head of Emerging Local Markets Research at JPMorgan
- Former member of the firm’s Emerging Markets Management Committee, on which he was responsible for building JP Morgan’s local currency research effort and developing a suite of models and indices that have become benchmarks for the asset class.
- Ph.D. in Economics from Harvard University