When Tundra launched its first fund focused on Pakistan on 14 October 2011, it was met with skepticism, resistance, and in many cases, disbelief. The notion of investing in a country frequently dismissed as uninvestable seemed absurd to some, even offensive to others who respected Tundra’s broader investment philosophy. But the firm maintained that its decision was not based on sentiment or speculation. It was grounded in actual data, conversations with local entrepreneurs, and what they observed directly from businesses operating in one of the world’s most misunderstood markets.
Over the years, Tundra’s team encountered consistent patterns of resilience within Pakistan’s business landscape. They met business owners running intergenerational companies, many of whom had navigated repeated cycles of economic and political crises. These individuals, despite fully understanding how Pakistan is often portrayed in international narratives, remained committed to long-term growth and sustainability. One entrepreneur aptly described it as “perception arbitrage,” noting that the majority of what is reported about Pakistan focuses on a narrow portion of its challenges, often ignoring broader realities.
Tundra has never ignored Pakistan’s systemic issues. From a flawed democratic structure and entrenched corruption to a legal framework vulnerable to misuse, the firm acknowledged each of these factors transparently. However, the argument was that these problems were not unique to Pakistan and are shared across many low- and lower-middle-income economies. In fact, part of the complexity stems from Pakistan’s legacy systems, which can be manipulated in ways more advanced than newer, less developed legal systems elsewhere. For Tundra, what consistently made Pakistan worth the risk was the quality of its people—sharp, resilient, and deeply entrepreneurial.
The path has not been without disruption. Pakistan’s market has been rocked by multiple internal and global events, each shaking investor confidence and impacting short-term performance. However, the recurring theme was that fear-driven reactions often exceeded the impact on business fundamentals. Valuations would fall sharply, even when core earnings remained stable. Over time, these patterns created opportunities for those who understood the deeper narrative.
Today, with over thirteen years of experience in the market, Tundra points to comparable returns between Pakistan and India. From the fund’s inception, Pakistan’s equity market has delivered an 8.6% annual return in USD terms, while India’s widely celebrated market has returned 9.1%. More significantly, in compound annual growth of earnings, the KSE100 index has produced 11.7%, far exceeding India’s SENSEX at 5.1%. Despite this, Pakistan trades at significantly lower valuations—just 6x earnings, compared to India’s 22x—highlighting a significant pricing gap.
Since 2013, Tundra has maintained investment professionals on the ground in Pakistan, further embedding itself into the ecosystem and gaining on-the-ground insights. For those interested in engaging with the opportunities Pakistan offers, Tundra extends an open invitation to connect and explore the value that exists behind the headlines.
