05998 city wire_may 11

565 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
565
On SlideShare
0
From Embeds
0
Number of Embeds
8
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

05998 city wire_may 11

  1. 1. Investec Africa & Middle East Fund<br />
  2. 2. Target audience<br />This document is only for professional investors, professional financial advisors and, at their exclusive discretion, their clients. No other person should rely on the information contained in this document.<br />If you plan to show this to your client please ensure that you comply with any applicable local marketing regulations.<br />This document is not to be generally distributed to the public.<br />
  3. 3. Agenda<br />Introduction to Investec Asset Management<br />The case for Investing in Africa and the Middle East<br />The market outlook for Africa and the Middle East<br />Investec Africa & Middle East Fund<br />
  4. 4. UPDATE QUARTERLY<br />mercurygdriveDeptsMarketingInvestor CommunicationsRFPRFP ContentCompany Level InformationStaff NumbersHeadcount statistics<br />UK<br />Staff: 260<br />Investment professionals: 71<br />Americas<br />Staff: 14<br />Asia Pacific<br />Hong Kong: 16<br />Taiwan: 20<br />Australia: 3<br />Southern Africa<br />Staff: 337<br />Investment professionals: 57<br />Investec Asset ManagementDistinctly African but with a global perspective<br />Independently managed investment specialist, wholly owned subsidiary of Investec Group<br />Founded in South Africa in 1991 by current leadership<br />$94bn under management<br />Largest manager of third party assets in Africa with approximately $41bn of client assets invested in the African continent<br />Distinctly African but with a global perspective<br />In the following Presentations:<br />GDG Inst<br />Assets Under Management*<br />Southern Africa: $45.0bn<br />UK & Offshore: $49.4bn<br />Total: $94.4bn<br />Distribution<br />Investments and Distribution<br />Staff numbers exclude temps and contractors <br />*All AUM data as at 31 March 2011<br />Staff data as at 28 February 2011<br />
  5. 5. Frontier investments are among our core capabilities<br />
  6. 6. A Summary of our Frontier Markets Business<br />IAM Location<br />Source: Investec Asset Management, September 2010<br />*Based on capital commitments as at September 2010 and earmarked Africa (ex SA) allocation<br />
  7. 7. A Summary of our Frontier Market Fund Range<br />Source: Investec Asset Management, 31 August 2010. These are internal parameters and subject to change, not necessarily with notification to investors. The above shows the Fund investment strategies currently run by Investec Asset Management’s Frontier Team. The Fund(s) may not have been registered, verified or approved for marketing by the relevant supervisory authorities outside of the Funds’ domicile. Please visit www.investecassetmanagement.com/registrations to check registrations by country. Details of these Funds may only be distributed, disseminated, forwarded or have its contents disclosed in accordance with local marketing regulations. Responsibility for compliance with such regulations shall be your sole responsibility. <br />
  8. 8. UPDATE MONTHLY<br />Track record for our Pan Africa less liquid strategyPerformance as at 31 March 2011, net of fees<br />Calendar performance (in USD) as at 31 March 2011<br />* Inception date: 30 November 2005<br />Past performance figures are not audited and are not indicative of future performance, which may vary<br />Source: Lipper to 31.03.11, NAV based (inclusive of all annual management fees but excluding any initial charge) gross income reinvested, in US dollars. Performance shown is of A shares and would have been lower had any initial charge been included. Returns to individual investors will vary in accordance with their personal tax status and tax domicile. The Fund has not been registered, verified or approved for marketing by the relevant supervisory authorities outside of the Fund’s domicile. Details of the Fund may only be distributed, disseminated, forwarded or have its contents disclosed in accordance with local marketing regulations. Responsibility for compliance with such regulations shall be your sole responsibility.<br />
  9. 9. The markets of Africa and the Middle East<br />Libya<br />Morocco<br />Tunisia<br />E<br />Cape Verde<br />BRVM<br />Sudan<br />Nigeria<br />Uganda<br />Kenya<br />Benin<br />Burkina Faso<br />Mauritius<br />Guinea Bissau<br />Cote D’Ivoire<br />Zambia<br />Mali<br />Botswana<br />Zimbabwe<br />Niger<br />Namibia<br />Moçambique<br />Senegal<br />Swaziland<br />South Africa<br />Togo<br />... from Johannesburg to Jordan <br />Lebanon<br />Gulf Cooperation Council (GCC)<br />BVMAC planned for Gabon<br />Angola stock exchange proposed<br />Turkey<br />Algeria re-vamping its bourse<br />Kuwait<br />Jordan<br />Bahrain<br />Egypt<br />Qatar<br />UAE<br />Oman <br />Saudi Arabia<br />Ghana<br />Cameroon<br />Rwanda<br />Tanzania<br />Malawi<br />Source: Bloomberg and African Alliance Securities Research, December 2010<br />
  10. 10. Africa and the Middle East in context<br />
  11. 11. Growing faster than most other regions of the World<br />Compound annual real GDP, 2000 - 08%, constant exchange rates<br />African annual real GDP, 2008$ billions<br />Compound annualgrowth rate, %<br />Source: International Monetary Fund; World Bank World Development Indicators; McKinsey Global Institute, June 2010 <br />
  12. 12. Africa: Rising labour productivity and household consumption <br />Five year moving average of annual labour-productivity growth<br />The consumer sector is already more than 50% of all industries in Africa<br />Labour productivity growth (%)<br />Brazil, China and India<br />Africa<br />United States<br />Brazil, China and India<br />Western Europe<br />Africa<br />1980<br />1990<br />2008<br />2000<br />United States<br />Source: Global Insight; United Nations Conference on Trade and Development; <br />McKinsey Global Institute, June 2010<br />Western Europe<br />Source: Groningen database, BCG analysis<br />
  13. 13. Africa’s quality of life metrics are noticeably improving<br />Infant mortality: Almost halved from 1960 to present<br />Immunisation rates: More than doubled to 73% from 1985 to 2010<br />Primary school completion: From 50% in 1999 to 63% in 2010<br />Life expectancy: From 41 years in 1960 to 52 in 2007, notwithstanding HIV Aids<br />Mobile cellular subscriptions: From 1% in 1998 to 32% in 2008 <br />Sub-Saharan Africa, 1980-2030Real GDP per capita, 2009 US dollars<br />Source: IMF WEO, Standard Chartered Research, Other sources: McKinsey Global Institute, June 2010 <br />
  14. 14. MENA: Strong balance sheets and demographics<br />EMAILED FROM TAREK<br />LAST UPDATED: 14/05/10<br />Young demographics<br />Attractive debt levels <br />Egyptian population (Total million)<br />Private Sector Debt (% of GDP) 2010E<br />Government Debt (% of GDP) 2010E<br />Saudi Arabian population (Total million)<br />Source: Central bank data, Global Insight, Deutsche Bank research<br />Source: U.S. Census Bureau, International Data Base, 2008<br />
  15. 15. Summary of case for investing in Africa<br /><ul><li>Africa is a large continent, both in terms of size and population, with huge resources
  16. 16. Although it has an abundance of resources, it is not a commodity derivative - the GDP composition of its major markets, including South Africa, Kenya, Egypt and Nigeria, have a substantial service sector component
  17. 17. The continent has experienced sustained political and economic reforms and substantial improvements in the quality of governance
  18. 18. Levels of African sovereign debt have been falling, and are lower than their developed market peers
  19. 19. Africa has outpaced world GDP growth since 2001 with declining inflation and interest rates over this period
  20. 20. This offers a very attractive investment opportunity for a variety of compelling reasons
  21. 21. Most countries operate from a low economic base with penetration of many services relatively low
  22. 22. The capital structure of many African businesses tend to be unlevered
  23. 23. There is a dearth of suppliers of capitalto capitalise on the opportunity
  24. 24. As a result, Africa is starting to reap the benefits
  25. 25. We believe peace and democracyis dawning on the Continent, overcoming occasional pockets of unrest
  26. 26. Africans are generally more positiveabout the continent
  27. 27. Private capital flowsto Africa have been positive
  28. 28. The economies are more integrated with the rest of the world</li></li></ul><li>Summary of case for investing in the Middle East<br /><ul><li>The Middle East is changing positively:
  29. 29. Peaceful revolution in Egypt and Tunisia –should lead to more accountable governments
  30. 30. Saudi Arabia – Pre-emptive reforms by the monarchy as the younger generation demands representation
  31. 31. (The uprisings in Libya and Bahrain so far seem to involve tribal and sectarian undertones)
  32. 32. Short term volatility in Middle East markets as the region moves away from ‘one-man ‘rule
  33. 33. This strengthens the long term case for the Middle East: a large market, with a young populationand huge resources
  34. 34. The Middle East offers various investment opportunities:
  35. 35. Consumer growth: Young, increasingly affluent population as the Middle East develops and attracts talent
  36. 36. Infrastructure: GCC countries must focus on non-oil sectors and address lack of power/water infrastructure
  37. 37. Industrial expansion: A low cost producer of many essential goods, with ever growing markets in the East
  38. 38. Liberalising markets: Restricted markets gradually allowing foreign access, eventually boosting flows
  39. 39. Liberalising culture: Emancipation from large family homes boosting urban development
  40. 40. The Middle East is and will remain economically sound
  41. 41. Strong balance sheets, low debt to GDP
  42. 42. Accumulated wealth reduces sensitivity to incremental changes in the oil price
  43. 43. (Dubai debt crisis was no surprise, is being resolved and was never a reflection on the wider region as a whole)</li></li></ul><li>Outlook amid political uncertainty <br /><ul><li>Sub-Saharan Africa:
  44. 44. Nigeria elections were mostly smooth; investors to focus on economic growth, reform
  45. 45. Other holdings in Sub-Saharan Africa unlikely to see MENA-type unrest in the foreseeable future
  46. 46. North Africa:
  47. 47. Post-revolution Egypt:
  48. 48. Short term weakness in corporate earnings, a result of disruption in Q1 2011
  49. 49. Election scenarios:Pro-business Islamists compete with pro-business secularists in an environment in which populist rhetoric is ‘flavour of the day’
  50. 50. Longer term, the revolution should prove a very positive development, curbing corruption and energising the youth. Policy changes will be measured and will take growth and FDI into consideration
  51. 51. Arabian Gulf:
  52. 52. Bahrain unrest now under control, arguably had sectarian roots
  53. 53. Qatar, Kuwait, the UAE are unlikely to see similar unrest; small, mostly expat populations
  54. 54. Saudi Gov’t has so far prevented demonstrations and has taken measures to support the equity market
  55. 55. Though richer, Saudi Arabia has parallels with Egypt – a young, increasingly educated population
  56. 56. We are cautious of Saudi Arabia in the short term as the equity market reflects uninterrupted stability
  57. 57. Longer term, Saudi Arabia has a breadth of companies and the resources to grow its industrial base </li></li></ul><li>An experienced investment team focused on emerging and frontier markets<br />
  58. 58. Our investment philosophy<br />We invest with a private equity mindset:<br />Fundamental, on-the-ground research<br />Long term approach to value creation<br />Approach any investment as a partnership with company management<br />We identify potential opportunities by:<br />Using the Investec business network<br />Regular visits to markets and companies: over 170 country visits and 1,400 company visits¹ since 2005<br />We buy companies when:<br />Our fundamental research confirms significant latent value over the medium to long term<br />We sell when:<br />Management actions disappoint and significant better value can be found elsewhere<br />Valuation changes to the extent that sustainable returns of 15%+ seem unlikely <br />Changes in economies / regulations have a major negative impact on the operating environment of the company<br />1: For Investment Team as a whole<br />
  59. 59. Our investment process aims to identify high quality companies with high return potential<br />Companies elsewhere Junior Plus Senior International Bourses Eg. London, AIM, TSX, etc.<br />AME companies listed in Frontier markets <br />27 Bourses, 2,700+ securities<br />Size, liquidity, 50% of NAV based in AME<br />Size, liquidity, foreign restrictions<br />70+ securities<br />250-350 securities<br />Investment Shortlist<br />Frontier Investment TeamMacro + Strategy Team InputsIAM Industry Specialist as Needed<br />Country and Company Visits<br />Analysis and Research Database<br />Equity Ideas<br />Filter<br />Portfolio Manager<br />Universe<br />Result of Bottom up Process<br />AME Fund<br />Fund<br />As at end of March 2011<br />
  60. 60. Update<br />Monthly<br />Investec Africa & Middle East FundInvestment exposure as at 31 March 2011<br />Sector weightings*<br />Country of listing*<br />Cash % in footer<br />The cash content of the Fund as at 31.03.11: 40.3%<br />The portfolio is actively managed and may change significantly over a short period of time<br />*As a percentage of the equity holdings<br />This data is preliminary data.<br />
  61. 61. Investec Africa & Middle East FundTop 5 holdings<br />The portfolio may change significantly over a short period of time. This is not a buy or sell recommendation for any particular security. Data as at 31.03.11<br />
  62. 62. Update<br />Monthly<br />Investec GSF Africa & Middle East Fund DetailsPerformance as at 31 March 2011, net of fees<br />Performance<br />Past performance should not be taken as a guide to the future and there is no guarantee that this investment will make profits; losses can be made.Source: Lipper to 31.03.11, NAV based (inclusive of all annual management fees but excluding any initial charge), gross income reinvested, in US dollars. Performance would be lower had initial charges been included and will vary between different share classes dependant upon their applicable charges. Returns to individual investors will vary in accordance with their personal tax status and tax domicile.<br />* Inception date 30.04.08<br />
  63. 63. Important information<br />This communication is not for general public distribution. If you are a private investor and receive it as part of a general circulation, please contact us at +44 (0)20 7597 1900. <br />The value of this investment, and any income generated from it, will be affected by changes in interest rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which it invests. Past performance should not be taken as a guide to the future and there is no guarantee that this investment will make profits; losses may be made. <br />All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opinions stated are honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particular security. The portfolio may change significantly over a short period of time. <br />This communication is provided for general information only. It is not an invitation to make an investment nor does it constitute an offer for sale. The full documentation that should be considered before making an investment, including the prospectus and simplified prospectus or offering memorandum, which set out the fund specific risks, is available from Investec Asset Management. <br />This communication should not be distributed to private customers who are resident in countries where the Fund is not registered for sale or in any other circumstances where its distribution is not authorised or is unlawful. Please visit www.investecassetmanagement.com/registrations to check registrations by country. In Switzerland, the Africa & Middle East Fund’s Simplified Prospectus, Prospectus and Report & Accounts may be obtained free of charge from the Swiss Representative and Paying Agent, RBC Dexia Investor Services Bank S.A., Badenerstrasse 567, P.O. Box 101, CH-8066 Zurich. <br />In the USA, this communication should only be read by institutional investors, professional financial advisers and, at their exclusive discretion, their eligible clients, but must not be distributed to US Persons. <br />THIS INVESTMENT IS NOT FOR SALE TO US PERSONS. <br />Telephone calls may be recorded for training and quality assurance purposes. Issued by Investec Asset Management, May 2011.<br />

×