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The keys to success in emerging markets

3/10/2014

Jeff Tucker - UNC Kenan-FlaglerSix years after graduating from UNC Kenan-Flagler’s MBA program in 2000, Jeff Tucker did the unexpected: He helped start a private equity real estate firm in China.

Today, Tucker is managing director of Century Bridge Capital, which has grown into a firm with $187 million in assets under management and 20 employees in Beijing and Dallas.

Tucker spoke about growing a business in an emerging market at UNC Kenan-Flagler’s first Emerging Markets Conference on Feb. 21. Organized by the Global Business Center and the Emerging Markets Club, the conference brought together business and academic experts to discuss the changing face of emerging markets and how companies can succeed in them.

Century Bridge’s niche strategy helped it succeed: it invested in middle-income residential developments in second and third-tier Chinese cities, Tucker said. That means his firm has purposely avoided what many see as the huge opportunities for growth in China — mega-cities like Beijing and Shanghai.

“I can’t tell you how many people have told us we’re absolutely crazy, that we should be in places like Dubai,” he said. “We felt that this is a strategy we could specialize in for many years to come.”

Still, the success of the firm’s strategy hasn’t come without challenges. Tucker listed limited financial transparency and cultural and political differences as potential obstacles for doing business in emerging markets.

“When we started, we were very focused on the macro opportunities, but we were somewhat naive about the micro challenges,” he said.

Many people view emerging markets — which now account for about 50 percent of the world’s gross domestic product — as either huge markets for growth or too risky. The truth, he said, is somewhere in between. “Not all emerging markets are equal, you have to be granular.”

That’s what Century Bridge has worked to do: mitigate risk, align interests and make sure the strategy fits the market. The firm worked from the start to align its strategy with China’s goal to grow the middle class. It recognized early on that investment in emerging markets is difficult to do remotely, so they set up shop in China.

And they’ve found success with this targeted strategy.

In 2012, Century Bridge closed on its investment fund after raising $170 million. To make that happen, Tucker traveled to dozens of countries and attended hundreds of meetings to pitch to investors.

“You’ve got to be articulate about what the reality is, and you’ve got to be willing to go on the road and talk about it,” Tucker said.

Tucker gave the keynote address at the conference. He gives back to UNC Kenan-Flagler in many ways – by sharing his expertise and as a donor. He served on the Center for Entrepreneurial Studies advisory board, Alumni Council (including a stint as chairman) and the most recent Dean Search Committee. He currently serves on the School’s Board of Visitors and the International Board of Advisors.

Sponsors of the conference were Century Bridge Capital, Hershey’s and the N.C. Center for Global Logistics.