The Dublin-domiciled, Ucits III Magna MENA fund will begin investing tomorrow, with 90% of its allocation to GCC countries (Saudi Arabia, the UAE, Bahrain, Kuwait, Oman and Qatar). Saudi Arabian holdings will constitute over 50% of the portfolio.
Charlemagne director Varda Lotan is philosophical about the problems facing the region and believes the group may be able to benefit from inefficient pricing due to current events.
Unsurprisingly, Charlemagne is focused on the long-term outlook for the region: “there are always times of turmoil and they eventually work themselves out. It’s a region we consider to be important from a long-term perspective,” says Lotan.
Though the main geographic focus of the fund is on Saudi Arabia, Qatar and Abu Dhabi – areas which have thus far avoided the kind of mass protest seen elsewhere in the MENA region – Lotan says the fund will also have a presence in Oman and Kuwait, and does not rule out investments in the likes of Egypt as a result of the fund’s bottom-up stock selection process.
The fund will have 30-40 holdings, with plays including exposure to the oil, consumer and financial sectors. Lotan says fertiliser companies are also interesting Krombas, who was head of the MENA equities team at GLG before leaving for Charlemagne in September 2010.
The fund will have a minimum retail investment of €5,000, or the equivalent in Sterling or dollars. Krombas himself points to the region’s fundamentals – falling public debt, budget surpluses, strong dividend culture and low tax regimes – as reasons for optimism.
