Mobius: Africa – The Final Chapter

Courtesy of The Financial Times, a report on Mark Mobius’ interest in Africa:

Not every fund manager has a comic book made about them. Mark Mobius, the legendary emerging markets investor, has. Published five years ago, our hero finds himself in Africa in the final chapter.

Fast forward to May 2012. Franklin Templeton Investments will launch the Templeton Africa Fund – offering investors a chance to access a “diversified portfolio of companies across countries and sectors with exposure to secular growth trends on the African continent”. It’s as if Mobius was sticking to the (comic) script all along.

From Manga Mark Mobius – An Illustrated Biography of the Father of Emerging Markets Funds, the synopsis reads: “Chapter 12 The Last Frontier: A car kicks the tires in the countryside of Africa to look for investment bargains.”

The reality is perhaps a little more prosaic. The new fund will invest in equity securities in African countries or in companies based elsewhere but who have their principal business activities in Africa.

Mobius said in a statement:

We believe that Africa’s markets present significant opportunities for development due to a combination of strong economic growth, rising demand for the region’s vast natural resources, and a growing consumer market. Africa is expected to grow more than 7 per cent annually in the next 20 years, due to an improving investment environment, better economic management and developed as well as emerging markets rising demand for the continent’s resources

True, this is not the Templeton’s first investment in Africa but it is its first dedicated Africa fund. It’s launch underscores Africa’s attractiveness for yield-seeking investors. As Templeton Franklin point out, the number of African households earning more than $5,000 per year will jump from 85m to 128m in the next decade.

Africa funds had a tricky 2011 – the MSCI Africa index lost over 20 per cent of its value in the year. But in 2012, the index has recovered somewhat, gaining 11.6 per cent. According to Investment Week, JPMorgan have recently reopened their $377m Africa equity fund. The fund was mothballed in 2010.

Mobius and Templeton will be hoping that the hero wins in the final chapter after all.



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