Capacity Constraint in Emerging Markets Equity
Capacity constraint in emerging markets equity has exacerbated in recent years, as newly developed strategies have not been able to offset closures of leading emerging markets equity products in the face of institutional investors' high demand for emerging markets investment. In this memo we analyze the open/close status of all emerging markets equity products in the current institutional marketplace, key factors to determine managers' capacity and product closure decisions, the asset levels where managers closed or plan to close their products, and new developments that may increase or decrease available capacity in this asset class. Results from our survey of institutional investment managers were used to support our analysis.