South Africa hedge fund managers Laurium Capital has launched its first Irish-domiciled UCITS fund, the Laurium Africa USD Bond Fund, on the Prescient Global Funds ICAV platform.
The fund seeks to generate long term capital growth with low volatility and low correlation to equity markets by primarily investing in African (ex-South Africa) sovereign USD debt.
Its reference benchmark is The Standard Bank Africa Sovereign Eurobond (excl. South Africa) Total Return Index.
African Eurobonds currently provide access to a liquid asset class which is offering some of the most attractive USD yields globally."
The fund can also invest in sovereign local currency debt as well as corporate credit in order to take advantage of the full opportunity set of debt securities across Africa (ex-South Africa).
Paul Robinson, portfolio manager said: "With global investors on the hunt for yield, African Eurobonds currently provide access to a liquid asset class which is offering some of the most attractive USD yields globally.
"The asset class has grown immensely over the past decade with over USD 100 billion in outstanding issuance across 20 countries in Africa excluding South Africa. COVID-19 has provided an opportunity that has not happened since the Global Financial Crisis; spreads have widened providing an attractive entry point, similar to what investors are seeing in the global high yield space but at half the volatility and risk."
Laurium said it had been investing across the African markets since the company was founded in 2008, with the team's deep understanding and research across the African region, where data is scarce, giving a competitive edge by producing insights into the health of the underlying regional economies and their ability to pay back debt.
It also said it had a strong network of contacts ranging from underlying corporates to African sovereign policy makers and maintains a flexible investment approach which has proven to be successful when investing in African markets.
"Laurium has an entrenched partnership with the team at Prescient, one that has led to much growth and success in South Africa. We are now looking forward to achieving our international ambitions with them, starting with our Africa USD Bond Fund which we're very excited about," said Mark Preston, director.
"Having worked with the Laurium team since 2013, Prescient is proud to now support their international growth plans with this first Irish UCITS fund," said Rob Childs, head of business development at Prescient Fund Services Ireland.