The Frontier Within: Developed markets are filled with Frontier Markets.


The Frontier Within: Developed markets are filled with Frontier Markets.

Investing in Frontier Markets requires many skills but it is invariably underpinned by an adventurous spirit that is optimistic in nature.  The optimism stems from this idea that all humans are generally looking for the same things in life, and there is a time, place and conditions in which all people can thrive if given an opportunity.  Within this optimism is the opportunity to enrich yourself as an investor while doing good.

To that end, we think it is interesting and attractive to look at the plethora of Frontier Markets that lie within developed markets.  The benefit, of course, is that you usually get highly-developed regulatory regimes, rule of law, property rights, and a stable currency.  The negative is that you must invest in your own schemes or through private markets rather than the easy way of investing in public markets.

Our intent with this piece is to highlight some of these markets that we are calling Frontier Within, as well as to hopefully spark your imagination about what Frontier Markets really means.  To that end, we have provided a sample of 10 groups that fit this mold below.

As you can see, these groups earn substantially less than the rest of the country.  They are sizeable in number, and unsurprisingly many of these groups have been sources of tension in each of these countries.  For us, this reaffirms our optimism and we feel very confident in our belief that if these groups did not suffer economic disparity with the wider populations of each country, then they would not be dissatisfied and sources of tension.

One interesting insight that we gleaned from gathering these groups was that African-Americans are essentially in the exact same situation as Israeli Arabs.  This is rather shocking.  It drives home the frustration that African Americans feel within the United States, that their plight is considered to be less than that of many ethnic groups around the world, when in fact they may be similarly disadvantaged.

Examples of success stories

There are a number of approaches to investing in these groups, but we thought it would be helpful to highlight a few tangible examples.


These populations are historically unbanked or materially less banked than the wider population.  Part of the reason for this is a lack of collateral.  Microfinance or other non-securitized lending can be a way to tap into this market, enabling improvement in outcomes for the group in addition to a healthy profit margin along the way.  Examples of such operations would be First Nations Bank in Saskatoon, Canada, Arab Israel Bank was an independent bank which eventually got purchased by Bank Leumi and is a fascinating example of an offering explicitly targeting a group,  similar to this initiative CommBank Australia also has its own indigenous division.


For a variety of reasons these groups often are unable to produce their own cultural content.  There is a lucrative business in becoming the voice of the group within mass media.  Perhaps the most successful example of this is Black Entertainment Television.  However, other examples exist as well such as NRT for Kurdish speaking people.  Whether its newspapers, tv, podcasts, or music concerts there is a strong need for such groups to maintain what sets them apart, which often comes down to culture.  There are opportunities for savvy businesspeople to invest or promote such media and provide a competitive offering that can be competitive.  Often this can be as simple as dubbing content from other languages or replicate a successful formula from one language to another (think American Idol).

Consumer Packaged Goods

Historically, these groups did not have products that were designed or focused on their needs.  Iman Cosmetics was started by model Iman after she realized that there were no cosmetic products that were appropriate for a black skin tone.  As a result, Iman was one of the early companies focused on African American skin tones and hair. Similarly, the Inuvialuit Regional Corporation in Canada has dozens of businesses to cater to the unique needs of those that are First Nations.  This includes things as simple as Stanton’s which is a retail grocery chain that operates in places where historically limited selection and poor-quality products were the only ones on offer.

How can you invest?

There are many economic niches that remain untapped.  One of the most straightforward ways to build a successful business is to look at those groups who have unmet demands and invest or start a business yourself that caters to this demand in a high-quality way.  They key is to do it in a way that you can maintain your integrity while delivering a quality product or service.

Find an owner/operator

If you have an idea for a business that serves an unmet need, it may make sense to be the capital provider rather than the operator.  You can find an operator within the community who understands the group and is able to adjust an offering that has worked with other groups for his/her own.  This could be as simple as a modern coffee shop targeting First Nations or building a battery pack that is better-suited to the harsh desert climate that Bedouins are accustomed to.

Bring the group’s products to a larger market

This could be as simple as taking moccasins from First Nations group or offering Chechen cuisine to the world.  There are a variety of products from art, music, and food to clothing, tools, and services that a particularl disadvantaged group may offer that are unknown amongst the larger, wealthier population.  This has happened several times in American history as well as Australian/Canadian history.

Buy Assets

Assets in areas with high populations of any of these groups will by default be less expensive than assets within the country on average.  This bears true for all the groups we have highlighted, real estate is cheaper in Chechnya than Moscow, Black areas in the United States tend to be less expensive, and Uyghur-dominated areas are substantially less expensive than those areas with Han Chinese populations.

Real estate is not the only play, there are also businesses that sell at lower multiples and art tends to be less expensive.

Random thoughts

The Frontier Within is a market opportunity that for many of our readers is a lot closer and more comfortable with an investment than going and putting money in Cote D’Ivoire or Bangladesh.  It is also a way to get involved in businesses at the grassroots rather than putting money in the stock market and waiting for earnings to generate a sufficient return on your investment.

We love public markets, but we also think that managing businesses, even if it is as simple as buying a rental property and renting it out has a substantial reward in terms of investment return as well as sheer enjoyment.

Other groups that we think are worth exploring (certainly not an exhaustive list):

  • Native Americans
  • Sami People
  • Africans in Italy
  • Rohingya
  • Pashtun in Pakistan
  • Muslims in India
  • Christians in India
  • Kashmiris
  • Hindus in Pakistan
  • Malay in Thailand
  • Muslims in the Philippines
  • Filipinos in Japan
  • Hondurans in the United States
  • Somalis in Canada
  • Hutu in Rwanda
  • Blacks in North Africa (Morocco, Algeria, Libya, Tunisia, Egypt)
  • Tibetans in China
  • Mongolians in China
  • Tamils in Sri Lanka



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