Investors to eye riskier markets in 2013: Control Risks

With growth in major emerging markets set to slow in 2014, yield-hungry investors will be forced to look at riskier frontier markets like Colombia or sub-Saharan Africa, a director at global risk consultancy Control Risks told CNBC on Tuesday.

Chris Torrens, the director of global risk analysis for Europe and Africa at Control Risks, said one of 2014's key trends would be investors looking to frontier markets – the less developed end of the investable emerging market spectrum – as established emerging markets had now "emerged" and therefore growth was waning.

Bogota, Colombia

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"Companies are beginning to be forced to look at what we would call frontier markets, and the opportunities are there but the risks are higher as well," Torrens told CNBC. "So we're thinking about sub-Saharan Africa; we're looking at countries like Colombia, which have turned the corner after decades of civil war; we're even looking at places like the Philippines, which previously were tough places to be operating in and which have really improved.

"So there is some optimism out there, but companies are being pushed into areas where the risks are less familiar."

Torrens advised U.K. companies and other multinationals to focus on sub-Saharan Africa if looking for strong returns.

"It (sub-Saharan Africa) has been led by energy companies, they have got higher risk appetites, they are prepared to invest more heavily, but that's been followed by financial services, by telecoms, pharmaceuticals, consumer goods, so we're pretty positive about that."

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However, he added: "That said, if you take the market like Nigeria, which is probably the largest economy (in sub-Saharan Africa) now, they've got an election coming up 2015, there's going to be a lot of political tension arising from that. They have a Muslim extremist insurgency in the north east in the form of Boko Haram."

Torrens argued that growth was slowing in the BRICs – the moniker coined by ex-Goldman Sachs banker Jim O'Neill to describe Brazil, Russia, India and China – but remained positive about China in 2014.

"You may have some of the biggest challenges facing that country that it's ever faced, but you've got some of the smartest leaders in place who have ever been there," he said. "So you've got a group of seven people leading the country, President Xi Jinping, Premier Li Keqiang, both extremely business-savvy, Western-trained, you don't have these old Soviet technocrats you had before. There's the ability there to deal with those problems."

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Consensus forecasts are for Chinese growth of around 7.5 percent in 2014, although Deutsche Bank sees much stronger growth at 8.6 percent and recently stated that markets were underestimating China's growth potential.

However, London's Centre for Economics and Business Research (CEBR) recently said China's economy won't eclipse the U.S. until 2028, much later than some have suggested, due to both the economic strength of the U.S.and slowdown in China.

Clarification: This article has been updated to clarify Chris Torrens's job title.