Algebra Capital Launches MENA Fixed Income Fund
• BETA MENA Fund will be the first to capitalize on MENA corporate and local currency debt
Algebra Capital announced the launch of its fixed income business with the opening of the BETA MENA Fund today. Targeting $300m, this fund is the first to focus on MENA corporate credit and local currency markets.
Aiming for absolute returns above 10%, the fund should deliver returns above average regional inflation rates, and will initially be offered in UAE Dirhams (AED) and US Dollars (USD), later expanding to include Saudi Arabian Riyals (SAR) and Qatari Riyals (QR).
“This fund will be the first to take advantage of the $100bn corporate debt market in the Middle East and North Africa region, offering GCC and international investors a unique opportunity to benefit from the region’s improving credit profile and developing local currency bond markets,” commented Mohieddine Kronfol, Managing Director, Algebra Capital. “MENA debt, which is of investment grade quality, has historically performed well, delivering consistent returns with very low levels of volatility and virtually no defaults.”
“The amount of MENA debt created annually is approaching USD 200 billion and expected to rise further. Our estimates for 2008 include USD 95 billion in new bond issuance, 50% of which will be corporate. Sukuk issuance could approach USD 30 billion in 2008, doubling the region’s outstanding Sukuk aggregate”
“With regional debt issuance growing at north of 50% and set to continue, prospects for increased primary market activity and secondary market depth and liquidity continue to improve,” concluded Kronfol.
In line with Algebra Capital’s stated objective to deliver innovative products, the BETA MENA fund will be the first actively managed portfolio in the region operating on an efficient prime brokerage platform.
“The launch of the BETA MENA fund is a milestone for Algebra Capital as it also signals the launch of our second line of business, fixed income asset management, an area of strategic importance to our firm” commented Ziad Makkawi, Founder & CEO, Algebra Capital. “The MENA region is in the midst of a positive credit cycle making it an increasingly attractive target for regional and international investors.”
Algebra Capital has a distinct, research intensive investment style across the various asset classes it manages. Algebra’s focus on managing money has attracted international and regional investors looking for solid returns and unrivalled market insight into the MENA region.
