Specialist emerging markets hedge fund manager Charlemagne Capital has announced the launch this month of its first Middle East and North Africa fund, the Magna MENA Fund, which will inves
Specialist emerging markets hedge fund manager Charlemagne Capital has announced the launch this month of its first Middle East and North Africa fund, the Magna MENA Fund, which will invest in companies that have a significant presence in the Arabic-speaking world.
The areas in which the region will invest include the Gulf countries, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and North Africa, including Algeria, Egypt, Morocco and Tunisia, as well as Jordan and Lebanon.
The fund will seek to exploit market inefficiencies to generate excess returns independent of the broader market, within a disciplined framework of risk management and portfolio construction.
It will employ Charlemagne Capital’s bottom-up approach to stock-picking, shared by the eight other Magna sub-funds, and will focus on the banking, industrial, real estate and telecommunications sectors.
The investment case for the region is based upon the prospect of strong economic growth arising both from the reinvestment of oil wealth and from the potential of a young and rapidly developing population. The Gulf countries are embarking upon a USD800bn investment programme over the next five years, approximately equal to their combined current GDP, which can be financed from existing reserves.
The Gulf region has strong growth uncorrelated to other parts of the world, with significant savings and committed infrastructure projects, and its future growth is set to act as a magnet for capital and labour inflows.
North Africa has a young and fast-growing population and an emerging middle class but an under-penetrated consumer market. With limited economic risks and the prospect of high and sustainable economic growth, the region makes an attractive risk return proposition.
Lead portfolio advisor Gabor Sitanyi, together with Sharat Dua, will lead a team with an average of 18 years’ experience of emerging markets, especially in Europe, the Middle East and North Africa. Charlemagne Capital is already investing in some of these markets through EMEA mandates and its Magna Africa Fund.
‘The Gulf countries and North Africa offer safe, locally-driven growth opportunities at reasonable valuations which the Magna MENA Fund will seek to capitalise on through our investment process,’ Sitanyi says. ‘We have spent the past 12 months researching this space, meeting with a large number of companies, and we see plenty of attractive opportunities across a range of sectors.’
The fund will offer dealing daily except Fridays, in line with the other Magna funds, and will have euro, sterling and US dollar share classes.
