Banor Capital has launched the Aristea Sicav New Frontiers Equity fund.
The new fund invests mainly in shares in frontier markets — those in the very early stages of economic and financial development.
Frontier markets have a low correlation with more developed markets and show favourable growth trends, the investment management firm said.
The fund has a quantitative investment approach designed to exploit the market inefficiencies that are a feature of frontier markets. The aim is to generate positive returns in the medium to long term by actively managing risk and focusing on daily liquidity products.
The portfolio is highly diversified in geographical terms, with its main investments in Pakistan, Argentina, Vietnam and Kenya. The portfolio is typically composed of 40/60 securities and has an average exposure of 75%. The principal focus is on financials, consumer staples and telecommunications.
The investment vehicle will have the added expertise of the research team at Kallisto Partners, an independent Rome-based firm that specialises in quantitative methodologies for investment in financial markets during their early development stages.
“We’re excited to be able to offer one of the few funds entirely dedicated to frontier markets. Banor Capital’s infrastructure, with the added expertise of Kallisto Partners, is ideally placed to manage an innovative product like this. We believe in this asset class, given the high growth rate of frontier economies and the low correlation within the ‘investable’ universe and with respect to other asset classes”, said Giacomo Mergoni, CEO at Banor Capital.
“The growing international interest in this new asset class, backed by favourable demographic and economic trends, is attracting significant investment flows which our quantitative models identify so that we can then grasp opportunities for growth and alpha generation,” added Luca Clementoni, managing partner at Kallisto Partners.