November 14, 2012 / 9:43 AM / 5 years ago

Moroccan bank, Abu Dhabi firm to start Africa equities fund

DUBAI, Nov 14 (Reuters) - Morocco’s Attijariwafabank and Abu Dhabi-owned Invest AD plan to start a jointly-managed fund to invest in Africa’s listed companies, in a sign more institutional investors are lining up to tap growth in the continent.

The fund will be financed by the two companies at the outset and will be co-managed by the asset management arms of both parties, they said in a joint statement on Wednesday.

Global institutional investors plan to boost their asset allocation in African markets over the next five years, and are shifting to long-term investment strategies from more speculative, short-term bets, a survey released in January by Invest AD and the Economist Intelligence Unit (EIU) showed.

Africa’s frontier markets - the smallest, less developed and less liquid among emerging economies - are attracting long-term investors looking for growth opportunities outside the more developed markets of Europe and United States.

“Africa’s economic emergence is being driven by rising incomes and living standards across a broad cross-section of society, and across the whole continent - and this is partly due to increasing intra-regional trade and business links,” Nazem Al Kudsi, Invest AD’s chief executive said.

Invest AD is owned by Abu Dhabi Investment Council (ADIC), which focuses on countries closer to home and is a separate entity from Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds.

The investment firm teamed up with Japan’s SBI Holdings to set up a $75 million Africa fund in 2010 and invested in the 2011 initial public offering of Bank of Kigali , Rwanda’s largest bank by assets.

It also converted its existing Emerging Africa Fund to an Ucits standard fund - viewed as more regulated, transparent and liquid - to lure risk-averse European investors, Invest AD’s Chief Investment Officer David Sanders said in April.

Attijari has become Africa’s biggest private lender by assets outside South Africa after an expansion push since the last decade led it to grow in Tunisia and sub-Saharan Africa.

The bank is currently bidding to buy BNP Paribas’ Egyptian retail operations, sources told Reuters in October.

Reporting by Dinesh Nair; Editing by Mark Potter

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