The asset management division of Cairo-based EFG-Hermes is launching a regional investment fund. The Middle East & Developing Africa (MEDA) Fund will invest in both quoted and unquoted funds, and will focus on 'frontier markets', Tristan Clube, executive director of EFG-Hermes Asset Management, said on 16 June.

'The launch of the fund will close in early July,' says Clube. 'And there is a minimum size of $30 million and an initial ceiling of $75 million.' He says that the fund will be spread evenly on a geographical basis, with the Middle East, Sub-Saharan Africa and North Africa each constituting about a third of the fund.

The initial portfolio is likely to be invested in about 20 markets, including Egypt, Bahrain, Jordan, Lebanon, Morocco, Oman, Qatar, Tunisia and Saudi Arabia.

Clube says that the country allocation of the fund will be mainly determined by stock selection. 'We are going to look closely at the quality of the company, rather than simply take the top-down view and buy into a country,' he says. 'The explicit objective of the fund is to seek opportunities in pre-emerging markets,' says Clube. 'We are aggressively expanding our mandate into the regional markets.'

The fund will be open-ended after one year and will be sold to institutional investors in GCC countries and in the West. 'It will interest global emerging markets fund managers,' he says. 'They tend to invest in the more mature markets of the region - Israel, Turkey and South Africa - and lack the resources or the information flow to invest in the frontier

markets.'