The alpha Mena fund is one of the global emerging market holdings in the Henderson multi-manager portfolio. It is a concentrated portfolio of 20 to 30 stocks managed by Dubai-based boutique Algebra Capital.
Key sectors for the fund are financial services, construction, petrochemicals, fertilisers, logistics and transportation.
Henderson notes that the Mena region has been experiencing growth due to the rising price of oil. Its stockmarket returns have been uncorrelated with developed markets, which is attractive to a fund of funds.
Henderson says accessing the Mena region was not easy due to a lack of available funds but a review of the market led it to Algebra. The boutique was set up in 2006 and its management team have been managing money in the region for 10 years. Henderson was impressed with its management team and the fund’s lack of a growth or value style bias.
Henderson says one of the problems with regions such as the Middle East is that it can be difficult to get access to companies, so local knowledge and contacts are important. This is one of Algebra’s strengths and helps the company find opportunities in the IPO and private equity market, which is virtually closed to fund management groups outside the region.
Multi-manager director Bill McQuaker says: “Algebra is an attractive way to gain exposure to this interesting asset class but it is likely to be a volatile holding due to the nature of the region and concentrated portfolio.
“Our investment has been made with these considerations in mind and we will continue to watch developments closely.”