FG Capital Management, Ltd. is an investment management firm focused on emerging markets. For two decades, FG Capital's unique investigative and strategic capabilities have enabled us to capitalize on opportunities in the developing economies that are home to 80 percent of the world's population.
FG Capital understands how to navigate the complex universe of emerging market opportunities, from equity investments to debt restructuring. Peter Grossman, the managing director and co-founder of FG Capital, has designed and executed hundreds of transactions in emerging markets for 25 years. He has managed a wide variety of investments from an auto financing company in Poland, a steel mill in Bulgaria, to a cocoa trading company in Cote d'Ivoire and an investment fund in Brazil. He has often advised sovereign countries, helping them resolve their external debt claims and manage debt repurchase programs.
Mr. Grossman's experience in advising sovereigns regarding their debt management has given him a unique perspective on countries facing debt problems. There are certain countries that are unable to honor their contractual commitments to exogenous shocks often beyond their control, and there are others who largely chose not to do so - countries that are so terribly mismanaged that their primary governmental function is corruption. Often, such corruption is accompanied by the paradox of substantial natural resource wealth and glaring poverty. Mr. Grossman has extensive experience in advising companies that have ended up in the crosshairs of such regimes.
In the course of managing FG Capital, Mr. Grossman has encountered a wide variety of sovereign debt claims, of which he has purchased two. FG Hemisphere Associates, a special-purpose vehicle managed by FG Capital, was set up to purchase these claims. In both cases, the countries were incredibly wealthy in terms of natural resources, but too little of the revenue from these resources was ending up in the national treasury. FG Hemisphere believed that the market had mispriced the debt by focusing on the governments' claimed revenue rather than the revenues that these natural resources should have been, and indeed were, generating. At their core, these countries were suffering from lack of proper management, not a lack of resources.
FG Hemisphere's strategy in part depends on asset tracing and on emphasizing governance and transparency reforms that will recapture this lost revenue for the public coffers. It demands accountability from these governments. As a result of this work, FG Hemisphere has uncovered many multiples of what it has sought in settlement of its claims. Should governments choose to properly manage these resources, it will mean considerably more money for education, health care, and development programs, and for resolving their legal obligations fairly, responsibly and transparently.
In the course of its groundbreaking anti-corruption work, FG Hemisphere has worked closely with donor governments and multilateral institutions to expose these lost revenues and to recommend policies that will help ensure that the abundant natural resource wealth of these countries benefits all citizens. We believe that this work has been, and will continue to be, instrumental to alleviating poverty in these countries and to encouraging real, long term, sustainable development.