As a fallout in emerging markets — once hailed as a safe-haven from the global financial crisis — gathers pace, asset managers are scrambling for newer markets.

What about North Korea? The Stalinist country boasts large untapped natural resources with deposits of gold, coal, zinc and other minerals. It has virtually no capital markets and its banks are all state-owned — making it a true safe haven from the global financial crisis.

The communist state has a good logistics route. It has borders with China, Russia and of course South Korea and a short sea route to Japan. South Korean firms such as Hyundai and LG already invest in the North.

KoryoAsia Limited has just launched subscription to the ChosunFund, a fund designed specifically for investment in North Korea. It is seeking to raise an initial $50 million.

“The DPRK (Democratic People’s Republic of Korea) has effectively been cut off from the international business community for decades. The country holds huge natural resources but is capital starved and lacks the technology and management skills with which to develop them.” Colin McAskill, Executive Chairman of KoryoAsia, says.

The fund will focus on North Korea’s extractive industries and energy sector, as well as the country’s defaulted London Club Debts. Its investment objective is cash flow plus capital growth with investors getting part of their money back initially through redemption of the loan capital, followed by dividends.

But this may be for long-term investors only — it has an initial life of seven years. McAskill also warns that the fund perhaps has more risk attached to it than most funds.

Investors may also want to look at the country’s rocket sector — the ex-”Axis of Evil” country says it is preparing to launch a satellite on one of its rockets, which analysts have said would actually be the test-firing of a long-range missile designed to strike U.S. territory.

South Korea’s Hyundai is counting on Genasis to be the start of something new. The Genasis, described by Edmunds.com as a “game changer,” won the North American car of the year award at the Detroit auto show, edging the Ford Flex 189 votes to 180. 

Hyundai is counting on the Genasis as a “halo” car to lure more affluent buyers. Hyundai’s victory was the first in the award’s 16-year history for a Korean automaker.

One judge, Matt DeLorenzo of Road & Track magazine, said:

“Hyundai Genesis shows that Korean automakers have come of age. Great fit and finish, high quality interior and smooth plush ride gives the Genasis the look and feel of a much more expensive automobile. “

Ford’s F-150 pickup (left) won truck of the year, easily beating Chrysler’s Dodge Ram pickup.

Automakers typically use the awards to market their vehicles, although General Motors’ recent success has not helped the U.S. automaker avoid the pain that declining demand in America has inflicted on the sector. GM won car of the year for its Chevy Malibu last year and took both awards at the 2007 show.

The U.S. auto industry experienced its worst sales in 16 years last year with demand off 18 percent to just over 13 million vehicles.  Hyundai and Ford sales were off 14 percent and 20.1 percent, respectively.

(Photo/Reuters)