Investment Strategies

Barings To Launch New MENA Fund

Wendy Spires Deputy Editor 11 March 2010

Barings To Launch New MENA Fund

London-based Baring Asset Management has announced that a two week initial offer period for its new MENA fund will open on 15 March.

The fund’s launch is testament to the firm’s bullish view of the Middle East and North Africa region: Barings believes that the region’s young and growing population and its resource-rich economy, along with its commitment to developing world-class infrastructure means that "some of the best investment opportunities in the world" exist in MENA. Additionally, the region’s recent volatility makes now an opportune time to capitalise on low equity valuations, the firm says.

The fund – which will be actively managed – will employ what the firm calls a bottom-up “growth at a reasonable price” investment philosophy.

The fund will initially invest primarily in Egypt, the UAE, Qatar and Turkey, as well as Saudi Arabia through investments in P Notes and swaps. The portfolio is expected to consist of between 20 and 50 stocks, and will have a high weighting towards financials, as this is the region’s largest single sector, Barings said in a statement.

Dr Ghadir Abu Leil-Cooper, head of EMEA equities at Barings, who will manage the fund, is currently positive on the consumer, industrial and healthcare sectors and is interested in banking due to the significant growth potential in mortgage and insurance products, as well as Islamic and investment banking. She is also positive on infrastructure, as the sector is set to see significant growth.

“The MENA region has a number of key factors in place to drive economic growth and deliver strong returns, but investors need to be aware that experienced, active management is crucial in generating high returns,” said Dr Leil-Cooper.

“Our analysis of 32 existing MENA funds reveals that over one year, the returns of the best and worst performing funds were 75.6 per cent and -6.6 per cent respectively.”

The fund, which will be a Dublin-domiciled open-ended investment company, carries an initial charge of 5 per cent and an annual management charge of 1.5 per cent. Minimum investment is $5000, £2500 or €3500.

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