03 Apr 2018

Taking Frontier Markets to the Next Level


Jake Cusack (MBA 2012) is cofounder of CrossBoundary, an investment firm that helps companies explore business opportunities in frontier and developing markets. In this interview, he explains how he and his partners focus their efforts on locations that make solid investments as well as offer opportunities for positive social impact.

“I came to HBS from the Marine Corps. In my Marine Corps experience, I spent several years in Iraq working in counterinsurgency, and from those experiences I became very interested in economic development in fragile states and frontier markets. So we founded CrossBoundary Advisory as we graduated business school, five years ago. Frontier markets are the next tier beyond emerging markets, places such as Kenya, Ethiopia, Rwanda, Nigeria, Ghana––a lot of these markets that are just on the cusp of emerging into a more developed country.

“There are three reasons why people might go into frontier markets. The first is that there is a perception arbitrage opportunity. In other words, the perception of the country is that it's quite bad, but the reality on the ground is different, and there actually are good investment opportunities. The second is that there's often a benefit to being in on the ground floor in some of these markets, where you can seize early opportunities before other players have come in. And the third is often an impact story.

“Investors and companies in these markets aren't motivated purely by financial returns; they're also interested in the ability to have a positive impact on the country and on the people in that country by bringing in private investment. In several of these markets, they have the opportunity to leapfrog to a more advanced stage of development. Rather than have the sort of legacy and dirtier infrastructure that most western countries have had to go through over the last 100 years, there's an opportunity for these countries, as they're building infrastructure for the first time, to immediately go to cleaner and cheaper sources of energy, such as solar and wind, rather than relying on coal and things like that. We saw that there was an opportunity to bring cleaner and cheaper energy through solar energy to these companies.

“We started CrossBoundary Energy as an affiliated investment vehicle to help finance solar energy for businesses in Africa, allowing them to lower their energy costs while simultaneously shifting away from dirty diesel to clean solar generation. So I think there's a great opportunity for us, in more developed countries, to bring in investment and relatively basic finance techniques to allow these countries to unlock their potential.”

(Published April 2018)

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Class of MBA 2012, Section C
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