Africa Funds

planteria

i hope the Renaissance fund is around for the long-term:A.

planteria

in looking at moving from HL to III my African options are reduced.

http://www.iii.co.uk/funds/fundfilter?task=show_fund_search&o=1&searchtype=advanced&submitted=submitted&l=50&FS__FSM__id=&FS__FSS__id=&FS__fn=africa&FS__isa=&FS__ia=&FS__y_gt=

i am considering moving from Renaissance Pan Africa to Renaissance Sub Saharan.

anyone any thoughts as to the best Africa fund to invest in?

planteria

i have sold my Renaissance Pan Africa fund, in my HL SIPP. planning to invest in Africa via my ISA, once i move across to III.

the Pan African and Sub-Saharan funds are both unbundled. only the latter seems to be available via III. what best to do? wait for them to update things?

anyone here invested in Africa:question:

grey_gym_sock

i'm not sure that there's any better approach yet than investing in western companies who do business in africa. though i expect there will be eventually.

JohnRo

The problem is rampant corruption that seems engrained in the psyche in a great many countries. It isn't just those in power and it isn't just crushing poverty.

It might be controversial but I have a non-dom relative who works there and pretty much everyone is on the take and after a kickback at every opportunity. Nothing much gets done without bungs. A white face lights up dollar signs. One anecdote being a huge supply of bottled water and flavoured drinks for workers, disappeared within a day. Everything needs to be locked down.

The stories about killings and just how utterly cheap life is there I find quite shocking. Somehow when you see it on the news it doesn't have the same impact as someone describing a first hand account. It also brings home how incredibly cosseted and fortunate we are here.

WannabeeMillionaire

I invested in the Renaissance Pan Africa fund for a while but it's performed rather badly and I have concerns about liquidity. Looking at similar funds, none of them have done any better.

I think others are right, that the best way to gain exposure to African growth is to invest in multinationals who operate there.

JohnRo

This outlook on Africa is taken from the Blackrock Frontiers IT (for what it's worth)

Another region where we think it is important to sound a note of caution is sub-Saharan Africa. While we think there is enormous long-term potential in many of the countries in this highly varied and promising region, we are concerned about the rate at which western portfolio money is being deployed, with little regard to economic fundamentals.

While on global scale many investors have been concerned about the current account deficits of the so-called 'fragile five', it is important to highlight that the budget and current account deficits of Brazil, India, Indonesia, South Africa and Turkey, are in percentage terms considerably smaller than many of the numbers we see in sub-Saharan Africa. We find it strange that relatively few of those investing in Africa highlight the potential risks of investing in countries such as Ghana, Kenya, Mauritius, Tanzania, and Uganda which all have current account deficits running at 8-15% of GDP as well as running substantial budget deficits. While countries can handle large twin deficits for long periods, we would be reluctant to suggest that African countries can ignore the economic realities any better than their Latin American, European or Asian peers.

Following the January 2014 month end we have zero exposure to the five countries above and currently have just 8% in Nigeria, down from close to 15% 18 months ago. We are concerned about what happens when the highly regarded head of the central bank leaves office in several months, and see little value in a series of industrial and consumer names that trade at very rich multiples.

bigadaj

JohnRo wrote: »

This outlook on Africa is taken from the Blackrock Frontiers IT (for what it's worth)

The Jim o Neil series on bbc a few weeks ago was interesting, highlighting his new mint countries, then being Nigeria. I thought after his brics, there were supposed to be the civets, but things change with opinion I suppose.

He interviewed a Nigerian guy who is projected to be the richest person on the planet within ten years, if things go pop then maybe not but I think he's worth over £10 billion currently.

I've only been to Ghana and South Africa in sub Saharan terms, and as two of the most developed nations. They are still pretty chaotic, I'd do my investing through external companies unless I was taking a real punt, and even on a real punt things like mining are often progressed by western firms.

Voyager2002

JohnRo wrote: »

The problem is rampant corruption that seems engrained in the psyche in a great many countries. It isn't just those in power and it isn't just crushing poverty.

It might be controversial but I have a non-dom relative who works there and pretty much everyone is on the take and after a kickback at every opportunity. Nothing much gets done without bungs. A white face lights up dollar signs. One anecdote being a huge supply of bottled water and flavoured drinks for workers, disappeared within a day. Everything needs to be locked down.

The stories about killings and just how utterly cheap life is there I find quite shocking. Somehow when you see it on the news it doesn't have the same impact as someone describing a first hand account. It also brings home how incredibly cosseted and fortunate we are here.

Your relative is either biased or incredibly unlucky in his choice of country and work-place. I lived and worked in Benin (West Africa) for a couple of years, and your account is about as accurate as a description of Benin as it is of Florida.

And do bear in mind that Africa is a vast and varied continent: a country that has experienced decades of civil war and the collapse of government (Congo) will be very different from one that has enjoyed decades of peace, stability and effective administration (Cape Verde).

JohnRo

either biased or incredibly unlucky

I don't think so, I expected a reply like that when posting but the experience of others who've visited Uganda several times is similar.

As for the original post, Algeria, Nigeria specifically. Oil industry. FWIW