Emerging Market Debt – Introducing Gramercy

Gramercy, a global emerging markets investment manager, takes over management of GAM’s emerging market debt funds from 16 June 2025. Gramercy’s Philip Meier and Belinda Hill introduce themselves, the team and Gramercy’s approach to emerging market debt investing.

Philip Meier: My name is Philip Meier. I'm Head of Emerging Market Debt and Deputy CIO at Gramercy. I have about 20 years of relevant industry experience and I joined Gramercy about six years ago. With me, Belinda Hill co-manages the funds and Belinda will introduce herself now.

Belinda Hill: Hi, my name is Belinda Hill. I co-manage the funds alongside Philip. I have about almost 20 years of experience and I've been with Gramercy for just about eight years now.

PM: After learning a little bit more about ourselves, I want to introduce Gramercy to you. Gramercy was founded in 1998 by Robert Koenigsberger. Robert is still managing partner and CIO of Gramercy. The firm is shared by Mohamed El-Erian, who is a brilliant top-down decoder and plays a crucial role in defining our global macro strategy.

We have five dedicated analysts that are helping Belinda and myself managing the funds, two dedicated sovereign analysts and three dedicated corporate analysts. Belinda is based in the US while I'm based in London, which gives us a good advantage of covering all time zones that are relevant in emerging markets globally.

We have local offices with more than 15 other investment professionals working for other investment strategy groups at Gramercy that are helping us to decode the macro and helping on analysing the bottom up.

At Gramercy, we believe we have a better approach to emerging market debt investing, which rests on five pillars. The first pillar is our thematic top-down view led by Mohamed El-Erian, who is a brilliant top-down decoder and helps us in difficult times like this where macro is really key.

The second pillar is our proprietary bottom-up research, which is based on a deep bench of dedicated analysts, as I've mentioned, two dedicated sovereign and three dedicated corporate analysts. The third pillar is integrated risk management.

Having done emerging markets nearly as long as Paul [McNamara], as we've discussed earlier, we are a bit cynical about emerging markets and we know that it's very important to manage the downside as well as the upside.

The fourth pillar is our integrated ESG approach, which is fully integrated into our investment process. And the fifth pillar is our unique emerging market debt expertise. Gramercy is investing in emerging market debt for over 27 years now and has dedicated groups not only in public credit, but also in private credit and special situations.

And we are exchanging our views and that really informs our investment decisions outside of the public market. I will leave it there now and pass it on to Belinda, who will explain you how these pillars are actually implemented in practice.

BH: Okay. Thank you, Philip. Now I'd like to discuss our investment process. Our process is a disciplined and comprehensive approach to emerging markets debt. There are two key components of our process. The first is the thematic top-down view.

And this is where Robert and Mohamed help us decode global macroeconomic events and develop directional market views which translate into proprietary scores for each of the sub-asset classes within emerging markets.

For local, we break that down into FX and rates. And our local scores are influenced by our FX compass, which takes a look at the differential between interest rates and growth between developed markets and emerging markets.

Our scores drive portfolio allocation. And these are critical, especially for the local currency strategies. The second component of our investment process is our proprietary bottom-up research. And this is where we leverage our team of dedicated EM analysts who have spent their entire careers looking at emerging market debt and building relationships with stakeholders, both locally and internationally, to evaluate emerging markets debt.

Our analysts we assign three scores to each issuer within our fixed income emerging market world. That is a fundamental score, a relative valuation technical score, and an ESG score. Again, for local, we break down local into FX and rates and establish scores for each of these two components within local.

These scores are aggregated into a proprietary bottom -up scoring matrix where Philip and I can go find the best bottom-up ideas to fill the portfolio. So, Paul [McNamara] was talking about how developed markets right now is starting to look a lot more like emerging markets in terms of the volatility that we're seeing.

So, can you walk us through some of the opportunities and challenges that we're seeing, particularly within local currency?

PM: Yeah, absolutely, Belinda. Local currency has actually been one of the outperformers, not only in the emerging market debt space, but also globally.

And that's because investors have lost a little bit of faith into the US dollar and US investments as such. That's why the euro is very strong, the yen is very strong, and emerging market currencies are also strong.

So, emerging market debt is actually, especially in the local space, like a beneficiary of the weakness in the US and Trump's policies that started with Liberation Day at the beginning of April of 2025.

So it remains to be seen how much this can continue. But definitely a takeaway is that investors are diversifying away from the US, which should benefit emerging markets structurally over the long run.