Companies in the Gulf Cooperation Council (GCC) region are increasingly attracting interest from North America and are expected to strengthen their position in equity indices over the short term, according to a survey of institutional investors.

Portfolio managers polled by New York-based consultancy firm InspIR Connect have shared the view that in less than a decade, the Gulf region will outrank the Latin American market in the MSCI and FTSE indices.

“When talking with portfolio managers, we discovered a consensus view that over the next five years, the GCC will represent the fastest growing portion of emerging market capital, and the region will eventually surpass all of Latin America in the MSCI and FTSE indices,” said Jeff Tewlow, Managing Director of InspIR Connect.

InspIR’s survey included North American investors that oversee $16 trillion in assets. The firm is part of InspIR Group, a consultancy in the Americas advising global companies from early stage through post-IPO.

More than half of those polled by InspIR were also underweight the region relative to the MSCI Emerging Markets Index, indicating that there is still a huge North American equity capital pool that the region can tap into.

“Our survey of some of the leading institutional investors in the US and Canada revealed a strong and growing interest in GCC companies,” Tewlow said. “Currently, there is a tremendous opportunity to tap North America’s massive pool of equity capital.”

One of the reasons North American investors are upbeat about the region is that Gulf businesses have improved their corporate governance in recent years, the firm said, adding that increased transparency and accessibility could boost trading liquidity and market valuations.

(Writing by Cleofe Maceda; editing by Brinda Darasha)