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View the article online at http://citywire.co.uk/wealth-manager/article/a762467

Why this AA-rated frontier markets star is pinning his hopes on multinationals

by Chris Sloley on Jul 18, 2014 at 14:51

‘Given the immaturity of the regulations in Nigeria, GSK Plc were legally permitted to vote their majority shareholding and force the deal through.’

Leger said the fund opted to engage in minority shareholder activism. This move, he said, ultimately led to SEC prohibiting GSK Plc from using their voting shares and the proposed takeover offer was withdrawn.

While instances like this may occur, Leger said, the better level of corporate governance and stronger balance sheets makes multinationals a more attractive way to invest in the frontier.

At present, Leger has 30.3% of the fund exposed to the consumer discretionary sector, as well as 20.3% in financials. At a country level, Nigeria (26%) marks the largest geographic bet at present.

The Coronation Africa Frontiers A has returned 42.8% in US dollars over the three years to the end of June 2014. This compares with a rise of 14.85% by its Citywire benchmark, the Dow Jones Africa Titans 50 TR, over the same period.

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