Business | Investment
Funds prowling in Africa
Agyare's London-based Nubuke Investments has a philanthropic as well as a profit-seeking aim: it will donate part of its fees to a charity designed to boost management skills across Africa by funding executive education and training.
- By James Mackintosh, Financial Times
- Published: 00:34 April 5, 2008
Tutu Agyare, a former board member of UBS's investment bank, has set up a new Africa hedge fund that is expected to raise more than $200 million (Dh735.6 million), making it among the biggest launches in the latest wave of Africa-focused hedge funds.
Agyare's London-based Nubuke Investments has a philanthropic as well as a profit-seeking aim: it will donate part of its fees to a charity designed to boost management skills across Africa by funding executive education and training.
A series of Africa-focused hedge funds have been launched recently, taking advantage of investor appetite for emerging markets and the strength of the continent's economies boosted by commodity exports.
However, most of the funds are small by industry standards, with only a few passing $100 million.
The biggest, and among the oldest, is London's Blakeney Management, which has more than $1.5 billion under management.
According to people familiar with Nubuke's fundraising drive, it is expected to secure $200 million to $300 million over the next two months.
Agyare, who was educated in Ghana, left UBS last November after 20 years, most recently as head of emerging European equities and a board member of the investment bank.
He said the new funds - a multi-strategy fund and a concentrated long-only equity fund - would take a "deep value" approach, looking for investments where a catalyst could boost prices.
Multi-strategy
The multi-strategy fund will trade currencies, government bonds and commodities, as well as equities and special situations investments such as private equity, bank loans and distressed debt.
Agyare said Africa was in the midst of a long-term economic revival and pointed out it had 15 per cent of the world population but only two per cent of GDP.
"A lot of the drivers behind a lot of the growth are domestic rather than just pure commodities," he said.
Hedge funds have been moving into Africa as the latest investment frontier, but short selling remains difficult or impossible in much of the continent, forcing the funds to be long-only or use imperfect hedges.
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