Blakeney Management, the London-based fund manager, has launched a fund that will target Middle East and African equities. The fund, called Blakeney Investors, offers the opportunity to invest in markets which are at an early stage of development and where potential returns are highest.
Among the countries in the Middle East being targeted initially by the fund are Cyprus, Jordan and Egypt. Other markets such as Bahrain, Oman, Morocco, Tunisia and Lebanon will also be monitored, but the level of investment will depend on their performance and the access given to foreign investors.
Blakeney Investors will be capped at $25 million, with a minimum initial subscription of $500,000. The fund will be structured as a Sicav (Societe d’investissement a capital variable), and will be listed in Luxembourg. The closing date for subscriptions is 13 October.
‘The markets we are focusing on in the Middle East and Africa are what we consider true emerging markets, and have yet to be fully discovered,’ says Khaled Abdel Majeed of Blakeney. The markets are characterised by being small, illiquid and with very little international investment, he says. ‘But if you do your homework, you can find a lot of value,’ Majeed says. The fund will focus on stocks with a low price earnings (PE) ratio. The average PE ratio of the initial portfolio is expected to be between 8-9.
Blakeney Investors is expected to outperform the IFC investable index, which tracks several of the markets being targeted by the fund, but also includes some larger more developed markets, such as Israel, Turkey and Pakistan. The IFC index, compiled by the World Bank’s private sector arm the International Finance Corporation (IFC), has grown by about 15 per cent a year for the past 10 years.