The Edinburgh-based Martin Currie Investment Management is launching a fund that will invest in equities in the Middle East. The Near East Opportunities Fund will mainly invest in Israel, but will also include Jordan, Egypt, and Lebanon, when that market opens up.
Tristan Clube, manager of the fund and a director at the Edinburgh firm, says provisional commitments have reached $20 million, mainly coming from European institutional investors. It is a hybrid fund, that will be closed- end for the first nine months, and open ended thereafter, with the closing date for initial commitments the first week of May.
‘From an investment point of view the timing of the fund is excellent,’ says Clube. ‘But from a marketing point of view the timing is not so good.’ The fund follows in the wake of several other Middle East regional funds launched since late 1994. Most of these funds have found difficulty raising commitments because of a lack of confidence in emerging markets since the collapse of Mexican peso, and due to political instability in the Middle East (MEED Banking Special Report, 24:3;95, page 10).
The fund will invest primarily in listed equities, but will also look at some companies at the pre-listing stage. The firm has operated a model portfolio since the second quarter of 1994 to develop an investment strategy. The board of directors includes representatives from Jordan, Egypt and Israel.
The fund is Bermuda domiciled and Dublin-based. The custodian is the Midland Bank, with support from the British Bank of the Middle East, both of which are subsidiaries of HSBC Holdings. For Israel, Bank Hapoalim will act as the custodian.