Raising Capital in Emerging Markets: Lessons from the Field

Perspectives from Institutional Issuers and Investors

The past decade has ushered in a volatile yet promising chapter for institutional capital in emerging markets. As macroeconomic headwinds, geopolitical risk, and global capital flows evolve, so too must the strategies of institutional investors and issuers navigating these complex environments. At Quarter Century, we’ve had a front-row seat advising on capital market transactions across frontier and emerging economies—and we’ve learned a few critical lessons along the way.

The New Landscape for Institutional Capital

While much of the discourse around emerging markets focuses on startups and early-stage VC, institutional investors—from sovereign funds to pension managers—are grappling with more structural questions:

• How do you price sovereign risk when volatility is the new normal?
• What mitigations are effective against political interference or capital controls?
• How can issuers in these markets tell a credible story that meets global institutional standards?

2024 was a telling year. Global capital allocations to emerging markets dropped by over 40%, with fixed-income issuance slowing significantly and appetite for local currency debt continuing to wane. But beneath the caution lies a recalibration—not a retreat.

Key Lessons from the Field

1. Capital Raising Is a Strategic Process—Not a Transaction

In underdeveloped markets, the capital raising process often lacks continuity. Issuers who treat market access as episodic—only emerging during windows of yield hunger—struggle to build investor confidence. Successful sovereigns, DFIs, and corporates maintain ongoing dialogue with institutional investors, creating familiarity and reducing perceived risk.

At Quarter Century, we encourage clients to view capital raising as a governance function, not just a financial one. This shift in mindset builds credibility, especially with long-term investors.

2. ESG Is No Longer Optional

For institutional investors allocating to emerging markets, ESG filters have moved from a checkbox exercise to a structural screen. In markets where transparency or governance standards are still maturing, issuers that proactively lead on disclosure and social impact stand out.

We’ve seen clients in resource-rich economies secure investor buy-in by aligning projects with global sustainability frameworks, even where local regulations lag. The credibility gap is real—but it’s also bridgeable.

3. Blended Finance Can De-Risk the Capital Stack

One of the most underutilized tools in emerging markets is blended finance. By combining concessional funding (often from multilaterals or development banks) with commercial capital, issuers can reduce risk premiums and attract a broader investor base.

Institutional investors we work with are increasingly open to tiered structures and credit enhancement mechanisms, especially where first-loss tranches or guarantees are in play. These structures aren’t new—but their relevance in fragile markets has never been greater.

4. Local Context, Global Standards

Perhaps the greatest lesson is this: capital markets are inherently global, but capital raising is deeply local. Whether you’re issuing a $500 million Eurobond or attracting pension fund investment into infrastructure, understanding local political economy, currency dynamics, and institutional behavior is essential.

At Quarter Century, our edge lies in translating between international investor expectations and domestic issuer realities. We’ve seen firsthand how trust, transparency, and a sharp story can unlock capital even in “risk-off” environments.

Looking Forward

The path to deeper capital markets in emerging economies isn’t linear. It requires patient capital, strong institutions, and credible storytelling. But despite near-term volatility, we remain optimistic. With the right architecture and advisors, institutional issuers and investors can find opportunity—where others see only risk.

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Quarter Century specializes in capital advisory, fundraising strategy, and investor relations in frontier and emerging markets. If you’re an institutional player seeking to access or allocate capital in these regions, we’re here to help you navigate with confidence.