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Making waves in MENA: top equity managers of the past five years

Making waves in MENA: top equity managers of the past five years

The Middle East and North Africa has undergone a tumultuous time over the past few years, going back to the Arab Spring at the end of 2010 to the rise of IS militants more recently.

Against this backdrop, sector specialists have sought to tap safe havens and baskets of growth within this wide-ranging region.

There are currently 45 managers operating in the Equities – Middle East & North Africa sector, while 20 of these can attest to track records dating back to October 2009.

Taking a closer look at the longer-term performers, the average manager of this 20-strong group returned 40.1% over this timeframe, which was beaten by nine managers or manager teams.

Meanwhile, the most commonly held benchmark, the S&P Pan Arab Composite TR, rose 58.8% in US dollar terms over the same five-year period to the end of October 2014. This was surpassed by six of the 20 managers.

Let’s take a closer look at the standout fund managers going above and beyond the index over the past five years and what stock or sector bets in this varied landscape have helped propel performance.

3. Yong Wei Lee, Emirates NBD Asset Management

Funds: Emirates MENA Top Companies Inst USD Daily/Emirates MENA High Income USD A Acc

Five-year total return (October 2009-October 2014): 61.74%

The first of the top three managers is Yong Wei Lee, who is head of MENA equities at UAE-based investment firm Emirates NBD Asset Management. He has achieved this outperformance across two MENA-focused strategies.

Lee runs a total of three equity funds, with the largest of the two applicable MENA funds being the $155 million Emirates MENA Top Companies fund. This fund, which has existed since November 2007, was launched as a Ucits-compliant fund in September 2014.

This fund, which echoes the investment strategy of the existing Jersey-domiciled fund, has recently bolstered its cash weighting from 5% in August to 14.7% at the end of September, which is the most recent available data. This move coincided with Lee cutting exposure to a number of banking stocks.

2. Nina De Martinis-Majstorovic, Amundi*

Fund: Amundi Fds Equity MENA/Ocean Fund Equities Mena Opportunities N

Five-year total return (October 2009-October 2014): 75.57%

Nina De Martinis-Majstorovic is included in this analysis despite stepping down from Amundi at the end of October. Her departure does not detract from the strong five-year track record the Paris-based MENA specialist posted during her tenure with the French asset manager.

Martinis-Majstorovic ran two MENA-focused funds during her tenure with Amundi, these were the Amundi Funds Equity MENA and Ocean Fund Equities Mena Opportunities fund. The longest-running of these was the Luxembourg-domiciled Amundi Funds Equity MENA, which she ran since May 2008.

In this fund, now run by Remy Marcel, Martinis-Majstorovic was largely invested in the Saudi Arabian market (52%), while having significant exposure to other GCC nations, such as UAE, Qatar and Kuwait. Despite voicing concerns over volatility in the country, Egypt is now a marginal overweight in the fund.

*Performance relates to the period under Martinis-Majstorovic’s tenure

1. Sharat Dua, Charlemagne Capital

Funds: Charlemagne Magna Africa A EUR/Charlemagne Magna MENA R EUR

Five-year total return (October 2009-October 2014): 76.29%

Citywire AAA-rated manager Sharat Dua is the standout manager in the sector over the past five years, with his performance across two MENA-focused funds for London-based investment firm Charlemagne Capital.

The bulk of outperformance is drawn from the Charlemagne Magna MENA fund, which he now co-runs with fellow Citywire AAA-rated manager Akhilesh Baveja. This is the top performing MENA-focused fund on both one- and three-year absolute return basis.

According to the October 2014 factsheet, the largest exposures are to the Saudi Arabian market, which makes up 56% of the fund, while UAE (26%) and Qatar (11%) are well represented. Financials (42%) is easily the largest sector allocation in the fund.

The duo said recent performance has been retained despite difficulties in the oil market, which has undergone a strong drop in price. They said the portfolio has limited direct exposure to oil stocks and a significant underweight to petrochemicals.

Top five in full

Fund manager Fund(s) Five-year TR (Oct 09-Oct 14)
Sharat Dua Charlemagne Magna Africa A EUR/Charlemagne Magna MENA R EUR 76.29%
Nina De Martinis-Majstorovic Amundi Fds Equity MENA/Ocean Fund Equities Mena Opportunities N 75.57%
Yong Wei Lee Emirates MENA Top Companies Inst USD Daily/Emirates MENA High Income USD A Acc 61.74%
Stephen Dover/Purav A. Jhaveri Franklin MENA A (acc) USD 60.69%
Oliver Bell T Rowe Price Africa & Middle East Fund/T Rowe Middle East & Africa Equity I USD/T Rowe Price Institutional Afr & Middle East Fund 60.37%

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