Renaissance AM soft closes African equity fund

Inflows of $40 million since the start of 2013 has led emerging market funds specialist Renaissance Asset Managers to soft-close its sub-Saharan African equity strategy.

The company said it had opted to turn away new money from the Renaissance Sub-Saharan fund after it reached $150 million assets under management. This is in order to preserve liquidity within the strategy.

Renaissance said the main drivers for this increase in assets had been investor interest from the UK and Europe and the fund's overall assets have more than doubled over the past 12 months.

A spokesperson for Renaissance AM said the expected capacity of the fund is projected at around $200 million but the company felt it was important to take measures to slow flows into the fund.

‘We have soft-closed the Sub-Saharan Fund to look after the best interests of our existing investors. We believe that tightly-managed capacity allows our institutional investors to access the best investment opportunities without sacrificing liquidity,’ the spokesperson said.

The Renaissance Sub-Saharan Fund was launched for Sven Richter, the company’s head of Africa and Frontier Markets, in October 2010. Johannesburg-based Richter invests on a bottom-up basis and scans a universe of around 400 investible stocks from across the sub-Saharan region.

Among the largest holdings in the portfolio are banking group First Bank of Nigeria and Telecom Egypt, a company Richter said many investors had overlooked due to political concerns.

Over the past 12 months, the Renaissance Sub-Saharan fund returned 40.09% in US dollar terms. This is while its Citywire benchmark, the MSCI EFM Africa TR USD, rose 7.12%.