Insparo Asset Management has broadened the mandate of its current flagship strategy, the Insparo Africa and Middle East Fund, to include the wider frontier markets, and renamed the fund to Insparo Frontier Markets Opportunities Fund.

Mohammed Hanif, CEO and CIO of Insparo Asset Management, who has managed the fund since its launch, said the asset manager is planning to decrease its exposure to Africa in order to allocate capital to capture market dislocations happening outside of the African continent.

“Geographic exposure will largely be driven by where we believe the best risk/reward profiles can be found in the global frontier markets, he told Africa Global Funds.

The strategy will primarily invest in the sovereign debt, corporate debt and currencies of frontier markets around the globe, aiming to take advantage of the opportunities that have emerged from the market dislocations in the aftermath of the most recent financial crisis.

Hanif said that frontier markets debt offers an interesting alternative for investors looking for returns and yields which are not as closely correlated with the major global markets as the more developed emerging markets.

These markets include Kazakhstan, Venezuela and Indonesia, as well as countries such as Russia, Ukraine and even Greece – countries which might previously have been considered ‘emerging’ but where geo-political risk has affected the performance of their economies and markets.

“Ongoing geo-political risks lead to market uncertainty, and low growth has led to unsustainable debt levels both on corporate and sovereign credits. This new market environment opens up deep value investment opportunities in previously less researched, non-core markets,” he said.

Hanif said the $80m AUM fund will continue to hold some core African names - a mixture of corporate credits, sovereigns and supranational bonds - which currently make up around 40% of the portfolio.

“We will continue to hold large parts of the portfolio in Africa as part of the funds long term core holdings. Much of our thesis around the 'Africa Rising' story remains the same which is why we remain invested in specific African names. The strategy will differ in investing style as this fund will also look to generate returns from opportunistic, distressed and event driven investments,” he said.

“Since Insparo’s inception the firm has invested throughout all of Frontier Africa. We are very comfortable investing in the African continent and expect to keep doing so if the right opportunities present themselves,” he added.

The Insparo Africa and Middle East Fund, has returned in excess of 7% per annum since its inception in June 2008.