African fund market lifts off

With over 20 new MENA and Sub-Saharan Africa funds set up in the last 18 months, are African stocks getting over-valued? Julian Evans reports.

Two years ago, you could count the number of international funds that invested in Africa, excluding South Africa, on one hand. Although several pan-Africa funds were raised in the mid-1990s, by managers including Morgan Stanley and Barings, most had lost money and struggled to find stocks in which to invest, and closed down after a few years. Only two pan-Africa funds survived and prospered – Blakeney Asset Management, managed by Miles Morland, and Emerging Market Management, managed by John Niepold.
In the last 18 months, however, over 15 new funds have been set up to invest in African stocks. Six new funds were launched or announced in May and June alone.