London (Press Release) – Insparo Asset Management (Insparo) has bucked the industry trend by offering shorter redemption terms for its outperforming Africa & Middle East fund.
The Insparo Africa & Middle East Fund returned 31.4% in 2009, significantly outperforming the MSCI Frontier Markets Index, which returned 7% over the same period. The dislocations caused by the economic landscape have allowed the fund to take advantage of value opportunities across its target markets. This strategy has enabled the fund to outperform the underlying indices while preserving liquidity. The fund previously had a two-year lock in period, but Insparo believes it is in the best interest of its existing and future investors to pass on the liquidity premium through shorter terms.
A staggered one year redemption profile will allow investors greater flexibility. Investors will be able to redeem as much as 25% of their original share purchase per quarter, meaning they can be fully withdrawn within a year. If necessary, investors can redeem within as little as three months, upon payment of compensating redemption fees to other investors.
Although Insparo has not received any early requests for redemption since launching the fund, the firm believes that in the current environment fund managers must be more attuned to investor sentiment.
Mohammed Hanif, Chief Investment Officer at Insparo, commented: “In the current climate, fund managers should be adapting to the needs of their investors, not the other way round. The climate is much more uncertain, and investors need to be offered more flexibility. While many managers have remodelled their structures to deter or prevent redemptions, we have made it easier for investors to withdraw if they wish. We’re confident that the only true deterrent to redemptions is high returns.”
Insparo believes that the revised redemption terms will also help attract new investors to the fund as the firm prepares to build on its success of 2009. As well as the strong performance of its fund, Insparo nearly doubled its headcount during the year. Insparo’s investment, operational, financial and marketing capabilities were all strengthened with key hires.
Jon Laidlow was appointed to an expanded COO role in April, with James Gore added to the operations team as Finance and Operations Manager in June. Mahan Namin joined as Portfolio Manager in August to enhance Insparo’s local market research and trading effort. Most recently the firm appointed former New Star Heart of Africa fund manager Jamie Allsopp, who will use his expertise and knowledge of African markets in a specialist marketing and investment role. The firm also announced plans last year to expand its marketing scope to investors in Hong Kong, the Middle East, South Africa and the US.
In addition to the revised redemption terms, Insparo has also revamped the fund’s risk management platform and infrastructure. Through increased trading lines to specialist brokers and more robust operational procedures, the firm is able to accommodate a wider range of financial products while significantly reducing its business risk profile.
Mohammed Hanif added: “Our strengthened investment infrastructure and risk management procedures reflect the promise we made to our investors from the start – to deliver a high quality investment opportunity with minimum risk. We continue to deliver on that promise.”
The Insparo Africa and Middle East Fund currently has US$165 million of assets under management. Investors include IPGL Limited (“IPGL”), a private holding company in which Michael Spencer, CEO of ICAP plc, together with his wife and family trusts, are majority shareholders; and South African entrepreneur Mark Shuttleworth’s Here Be Dragons. The Insparo Africa and Middle East fund is suitable for traditional hedge fund and institutional investors such as funds of hedge funds, private banks, family offices, HNWIs and pension funds.
The success of the fund in the last year saw the firm awarded the Emerging Markets (excl Asia) Asset Manager of the Year Award at the 2009 Global Investor Awards.
