The London-based Foreign & Colonial Emerging Markets began marketing a $60 million New York-listed Middle East investment fund on 26 September. The closed-end Emerging Middle East Fund has been set up with the sponsorship of the International Finance Corporation (IFC) to promote international investment in the region's stock exchanges, including Israel's (see Cover Story).

Shares will be allocated on 12 October and the fund will begin operations the following day. The underwriters are Nomura Securities of Japan and the US' Paine Webber. The IFC is acting as structuring adviser and will become a core investor, taking 500,000 shares.

Investment will be directed at listed securities in open, active and well-regulated stock exchanges in the Middle East, concentrating on Bahrain, Egypt, Jordan, Morocco, Oman and Tunisia. Up to 35 per cent of the fund will be invested in Turkey and Israel.

The fund is aimed at encouraging investment in the Middle East markets that have largely been neglected by international investors, says Peter Douglas, head of marketing at Foreign & Colonial Emerging Markets. The fund plans to attract investors in Japan, North America and Western Europe.

The fund is being promoted by the IFC as part of its programme to encourage international finance into the region. This includes setting up the Near Eastern Fund, that will invest primarily in securities listed in Egypt, Jordan, Morocco, Pakistan, Tunisia and Turkey. The total project cost to set up this fund is $30 million.