Traditional distinctions between developed and emerging markets – the sizes of their economies and markets, their government and corporate policies and even their growth rates – have blurred significantly over the past decade, resulting in higher correlations between developed and emerging market equities. Thus, global investors seeking growth and diversification must now look to the “emerging” emerging markets, or frontier markets. Although frontier markets offer opportunities, investing in them involves various risks: political risk (something increasingly prevalent in developed markets), macroeconomic risk (e.g., inflation risk, currency risk, etc.) and microeconomic risk (e.g., liquidity, custody and settlement risks). These markets are also harder to hedge, as investors often cannot hedge their currency exposure or short sell securities. For additional coverage of hedging currency risk, see “Local Currency Hedge Funds Expand Marketing and Investment Opportunities, but Involve Currency Hedging and Other Challenges” (Jan. 6, 2010). In a guest article, Marko Dimitrijević and Timothy Mistele, chairman and senior advisor, respectively, at private investment group Volta Global, and Bilzin Sumberg Baena Price & Axelrod partner Joshua M. Stone provide an overview of frontier markets, as well as analysis about the risks and considerations for investors seeking to invest in those markets. For more on navigating risks related to emerging markets, see “How Private Fund Managers Can Manage FCPA Risks When Investing in Emerging Markets” (Jan. 10, 2013).