Old Mutual Global Investors has collaborated with its colleagues, Old Mutual Investment Group in South Africa, to launch the Old Mutual Pan African Fund for a global client base.

Cavan Osborne, lead manager of the fund, said: “We are targeting people globally. The initial marketing drive is around individual investors, but institutional investors can also invest in the fund.”

The Old Mutual Pan African Fund, which has been in existence for the last four years and was available only to South African investors, was moved from the Russell platform to the Old Mutual Platform.

“Old Mutual is the largest asset manager in Africa. It has been around for over 150 years and it should have its Africa fund on its own platform,” said Osborne, commenting on the reason behind the re-launch.

The existing Old Mutual Pan African Fund has $11.75m AUM (as at 30 September 2014) and has delivered annualised USD net returns of 13.4%* over the past three years.

The fund was re-launched with $50, an addition of $40m of seed money from the Old Mutual Group.

Osborne said that the fund will be capped at $700m and will have a reasonable exposure to South Africa, to make sure liquidity remains manageable.

“The liquidity in Africa is obviously a problem in most markets with the exception of South Africa and that is why we will maintain that high exposure there,” he said.

The Fund, which is suitable for clients looking to invest over a five to seven year period, aims for long-term capital growth by investing in companies that benefit from economic developments and growth across the African continent.

When asked about market opportunities, Osborne said: “From my perspective we see reasonably attractive opportunities in Egypt and Morocco. We also see opportunities in some of the South African companies, particularly after the pullback we have seen.”

South Africa’s growth rate this year has been disappointing with 1.4% growth forecast, lowest rate in five years.
“It has been distorted by the fact that we had a lot strike action this year, particularly in the platinum sector. But South Africa will recover. The South African currency has depreciated significantly already, so I think that de-risks the investment into South Africa” he said.

The sector agnostic fund will continue to have a reasonable exposure to consumer staples and cement.
Osborne also pointed that some of the oil&gas companies are “looking interesting”.

When asked about Nigeria, Osborne said that it is starting to look attractive again at this stage, but there is “definitely a risk that you could have some currency depreciation”.

“The other talk is that there could be some unrest and uncertainty amongst investors because of the upcoming elections. We do have a reasonably high exposure to Nigeria (over 20%), which we are planning to reduce,” stressed Osborne.