The new fund offering is a Luxembourg-domiciled Sicav with an indicative yield of 9.4%.
“Africa has become a growth destination. The continent is benefitting from its huge natural resource endowment, as well as steady improvements in governance,” said a spokesperson for Investec.
“Financial services are expanding rapidly as an adjunct and underpin to growth.”
As a multi-strategy fixed income fund, Investec intends to offer investors the “full spectrum” of fixed income markets available in Africa – from South African sovereign bonds and credit, to the “genuine frontier markets” of African currencies.
“Debt markets are growing across the continent, as countries reduce their reliance on donor money and issue debt to fund essential development. Hard currency offshore debt and longer-dated local currency debt issuance are increasing across the region,” the managers wrote in a note to investors.
“Africa’s currency markets are growing in liquidity as the authorities relax regulation and yields are attractive, underpinned by low levels of local and external debt.”
The fund was launched on 16 August and has been seeded with $10m (£6m). Its alloction at launch was heavily weighted to BBB (37.7%), A (30%) and B+ (15.3%) rated bonds; in terms of country allocation the vast majority is in South Africa, where Investec is headquartered.
This is the second fund launch for Stopford this month following the Investec Global Defensive Bond Fund introduced two weeks ago.
