VAM Funds has launched a Luxembourg-domiciled frontier market equities product for institutional buyers.
The VAM Frontier Markets Fund, which complies with Ucits regulations, will invest in companies domiciled or doing business in the 33 countries classified by index provider MSCI as frontier markets, such as Qatar or the United Arab Emirates.
The fund will follow an all-cap strategy, typically holding between 60 and 90 stocks to allow for a diverse portfolio of varied companies and economies.
US-based investment manager Driehaus Capital Management, a long-standing partner of VAM Funds, will manage the fund. Driehaus has $12.9 billion (€9.8 billion) of assets under management, while VAM manages $650 million of funds.
Chad Cleaver, who co-manages the VAM Emerging Markets Growth Fund, will manage the new fund. He is also the lead portfolio manager of Driehaus’s emerging markets small-cap growth strategy.
Cleaver says: “Frontier 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 capitalisation-to-GDP ratios relative to developed and emerging markets, suggesting an undervalued opportunity set.”
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