Best Emerging Markets Hedge Fund: Shortlisted

Not investing in Africa and the Middle East is like ignoring emerging markets in the 1990s, South East Asia in the 1970s and Japan in the 1950s, according to Mohammed Hanif, fund manager for the Insparo Africa & Middle East Fund and chief investment officer for Insparo Asset Management.

He exhort investors to see the potential and the significant gains that can be made in this under-estimated market.

Launched in May 2008 the fund is the first for Insparo Asset Management. Hanif, however, is no strateger to the strategy. He has a wide experience in running emerging market portfolios.

Hanif invests in the equity, credit and local markets of Africa (excluding South Africa) and the Middle East, making "deep value esoteric investments in high growth frontier markets". Net return from the fund was 31.43% for the year to December 31, 2009.

These can be volatile and politically unstable regions and so requires a portfolio manager with considerable experience and skill in managing money under these circumstances.

Hanif has over 10 years emerging markets experience. He founded Insparo Asset Management in 2007 after having worked at Bluebay Asset Management where he was responsible for emerging market distressed debt and special situations.

In November 2009 Insparo hired Jamie Allsopp, former manager of the New Star Heart of Africa Fund which invested in sub-Saharan equities. Allsopp's experience of running money in these markets stretches back to 2007 when he was handed the launch of New Star. Allsopp contributes to the research and investment decisions of the fund and is also responsible for marketing the fund.

Hanif sees considerably opportunity in the region, with both sub-Saharan Africa and the Middle East among the world's fastest growing regions. He points out that sub-Saharan Africa has 13% of the world's population yet only contributes to 2% of the world GDP. The Middle East is the world's most concentrated region of hydrocarbon wealth. The GDP of both regions has tripled in the last six years. Hanif believes "this is set to continue at a pace".

The investment strategy of the fund begins by identifying the drivers of growth within the region and each country within the region, then looking to benefit from the sustainable growth drivers through the most efficient instruments. The fund takes a unique multi-strategy research intensive approach to investing in fixed income, equities and local markets ensuring it is not limiting the portfolio and missing out on "compelling" investments.

The investment team has developed extensive local business networks ranging from government departments, regulators and top tier banks to entrepreneurs and consultants who have worked with the company over the years.

The quality of Insparo's information togehter with its due diligence capability ensure the fund has access to a unique pipeline of deal flow as well as the framework of analysis to make informed decisions, says Hanif.

Fund facts: Insparo African and Middle East Fund

Full name of fund: Insparo Africa and Middle East Fund
Name of portfolio manager: Mohammed Hanif
Name of investment/management company: Insparo Asset Management
Contact information: Jamie Allsopp,  54 Baker Street, Watson House,
London W1U 7BU (+44 (0)20 7725 1098)
Launch date: 2008
Assets under management: $187.2 million at April 31, 2010
Net cumulative performance since inception: 30.45%
Strategy: multi-strategy
Share classes: US dollar, sterling, euro, Japanese yen, South African rand
Administrator: Caledonian Fund Services, Isle of Man
Auditor: KPMG
Custodian: HSBC, Standard Bank
Domicile: Cayman Islands
Management fee: 2%
Performance fee: 20%
Minimum investment: $1 million
Redemption/liquidity terms: staggered quarterly redemption.