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15 June 2007
The Advance Frontier Markets Fund Ltd $85m AIM IPO completed by Fairfax I.S. PLC
Fairfax I.S. PLC has raised $85m for the Advance Frontier Markets Fund (the “Company”) Ltd through the issue of 85m shares at a price of $1 per share. Call warrants were attached to the shares on a 1:5 basis.
The Company is a newly incorporated Closed End Investment Company established to invest and generate capital growth in a portfolio of funds and other investment products which derive value from exposure to Frontier Markets.
Investment Rationale
The Company will be managed by Progressive Developing Markets Limited (PDML) a dedicated global emerging markets investment manager incorporated in 1996 and authorised and regulated by the FSA. Since 1998, PDML has managed Funds that invest in global Emerging Markets using a fund of funds strategy. Its two existing funds have AUM of US$630m as at 31st March 2007 and are S&P ‘A’ rated.
The Investment Manager believes many of the characteristics that attracted investors to mainstream emerging markets in the past are now more prevalent in Frontier Markets, including:
Investment Policy
The definition of Frontier Markets includes;
Over the past 7 years the S&P/IFCI Emerging Market Index has produced annualised returns of 13.5% whilst the S&P/IFCI Frontier Markets Index has achieved annualise returns of 26.5%; to contrast, the MSCI World Index, MSCI US Index and the MSCI UK Index have returned 3.2%, 1.1% and 6.6% respectively over the same period (total returns in US$)
Listing Exchange: AIM
Listing Date: 15/06/07
Fund Raised: $85m
Nominated Advisor: Grant Thornton Corporate Finance
Broker: Fairfax I.S. PLC
The Company is a newly incorporated Closed End Investment Company established to invest and generate capital growth in a portfolio of funds and other investment products which derive value from exposure to Frontier Markets.
Investment Rationale
The Company will be managed by Progressive Developing Markets Limited (PDML) a dedicated global emerging markets investment manager incorporated in 1996 and authorised and regulated by the FSA. Since 1998, PDML has managed Funds that invest in global Emerging Markets using a fund of funds strategy. Its two existing funds have AUM of US$630m as at 31st March 2007 and are S&P ‘A’ rated.
The Investment Manager believes many of the characteristics that attracted investors to mainstream emerging markets in the past are now more prevalent in Frontier Markets, including:
- Low correlations amongst individual frontier markets and with developed markets
- Low volatility achievable through diversification
- Attractive company valuations can be found
- Positive macro economic trends – high growth
Investment Policy
The definition of Frontier Markets includes;
- Countries in the S&P/IFCI Frontier Markets Index
- Countries that do not qualify for inclusion in the S&P/IFCI Emerging Markets Index or the S&P/IFCG Frontier markets Index due to investability or liquidity of underlying equities
- Small emerging markets
Over the past 7 years the S&P/IFCI Emerging Market Index has produced annualised returns of 13.5% whilst the S&P/IFCI Frontier Markets Index has achieved annualise returns of 26.5%; to contrast, the MSCI World Index, MSCI US Index and the MSCI UK Index have returned 3.2%, 1.1% and 6.6% respectively over the same period (total returns in US$)
Listing Exchange: AIM
Listing Date: 15/06/07
Fund Raised: $85m
Nominated Advisor: Grant Thornton Corporate Finance
Broker: Fairfax I.S. PLC