Investec offers liquid Africa exposure

Investec_AfricaInvestec Asset Management is offering investors the opportunity to gain access to the Africa growth story without liquidity constraints through its Africa Opportunities Fund, due to be launched tomorrow.

The asset manager said that the fund is particularly suited to investors wishing to benefit from the opportunities and growth presented by Africa, yet are concerned about the liquidity constraints often typical of equity listed on African Stock Exchanges.

The new Africa Opportunities Fund promised to be a liquid, actively managed vehicle through which investors can gain exposure to the African growth story.

Managed by Malcolm Gray, the new fund addresses liquidity constraints by constructing the portfolio with a bias towards more liquid South African, Moroccan, Nigerian and Egyptian markets as well as to stocks listed on various international exchanges, which have a significant exposure to Africa. All stocks within the investment universe will have a minimum market capitalisation of  US$100m (€74.4m).

The fund will be daily traded and will have a minimum investment level of $3000.

Gray says: “Key to our investment process is to identify companies listed on both African and world exchanges that are exposed to the African growth story, its key themes and where a significant portion of their current or future value accrues from the continent. From a universe of around 200 stocks, the portfolio will typically comprise around 30 stocks.

Stock-specific risk is reduced through on-the-ground analysis conducted by the 27-strong frontier investment team and limits on exposure to an individual stock.”

Founded in South Africa, more than 50% of Investec Asset Management’s total assets under management are invested on the continent. The firm is one of the largest managers of third party assets in Africa.

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