The VAM Frontier Markets Fund has an investable universe primarily consisting of companies domiciled or doing business in the 33 countries classified by MSCI as frontier markets. The fund follows an all-cap strategy and will typically hold between 60 and 90 stocks to provide exposure to a diverse portfolio of underlying companies and economies.
VAM said the fund will be distributed internationally through its global network of financial intermediaries and third party advisory firms. It will also be available to institutional fund buyers, including discretionary fund managers, wealth managers, funds of funds, private banks, pension funds and family offices.
Driehaus Capital Management, the independent US-based boutique investment adviser and long-standing partner of VAM Funds, will employ its earnings growth momentum philosophy as the investment manager of the VAM Frontier Markets Fund.
The fund’s portfolio manager is Chad Cleaver who also co-manages the VAM Emerging Markets Growth Fund and is the lead portfolio manager of Driehaus’s emerging markets small cap growth strategy.
Cleaver said: “Over the years the emerging markets team at Driehaus has identified and invested in a growing number of compelling opportunities within frontier markets.
“These markets maintain remarkable demographics and strong future growth potential. Many consumer-related industries are at early stages of development and increasing local demand – such as in banking services, retail merchandising, mobile penetration and auto sales – which is a significant driver of growth.
“At the same time, these markets have small market capitalization-to-GDP ratios relative to developed and emerging markets, suggesting an undervalued opportunity set. Supporting the opportunity is the fact that foreign direct investment is increasing, which provides an additional significant driver of growth within the frontier universe.”
VAM said it chooses to partner with smaller, niche investment houses outside the mainstream as “there is a greater focus on delivering differentiated performance outcomes that advisers and investors value in the context of their wider asset allocation”.
VAM sales director, Nigel Watson, said: “We have worked with Driehaus for more than a decade and it is a very successful investment manager with a long track-record in US, global and emerging market equities, as well as alternative investments. Through our partnership, non-U.S investors have been able to gain access to these high growth strategies via our UCITS fund structure.”
The fund will aim to outperform the MSCI Frontier Market Index over the long term and will charge an annual management fee of 2.25%.
