BMO closes frontier markets strategy after hitting $1bn cap

BMO closes frontier markets strategy after hitting $1bn cap

BMO Global Asset Management has announced that the BMO LGM frontier markets strategy is now closed to new subscriptions, after the three funds it shelters have reached the $1bn (€846m) threshold in assets under management.

The BMO LGM frontier markets strategy invests in global frontier market equities, following a high conviction approach of quality companies who have sustainable business models, robust balance sheets and strong corporate governance structures.

The three funds of the strategy are managed by lead portfolio manager and CIO of LGM Investments Thomas Vester and co-portfolio manager Dafydd Lewis, having returned 16.1% annually from 1 January 2012 to 30 September 2017 while compared their common composite benchmark – 50% MSCI Frontier Markets plus 50% MSCI Frontier Markets ex GCC (NR) – returned 8.3% over the same period.

Vester commented: “We are extremely satisfied to reach this milestone but, most importantly, achieving this whilst producing consistently strong returns on our client’s capital. We set the capacity conditions when we launched the strategy in late 2011, understanding that discipline was needed to effectively manage funds in a less liquid asset class like Frontier.

“We have now acted on this condition six years later. We set the capacity at a level where we could balance our ability to invest across Frontier markets in a concentrated manner while also providing us the scale to have a real impact on the companies we invest with in terms of influencing agendas and improving governance standards.”

BMO GAM had CDN$709bn (€469bn) of assets under management as at end of July 2017.