Abu Dhabi asset manager Invest A.D. has launched two UCITS-compliant funds, which invest in Africa and the Arabian Gulf, to meet growing global demand for high-quality investment products to tap frontier market growth.
The Invest A.D. Emerging Africa Fund and the Invest A.D. GCC Focus Fund are registered in Luxembourg, and the asset manager is regulated by the Dubai Financial Services Authority.
Invest A.D.'s portfolio managers, who have built track records for the predecessor portfolios as Cayman Islands-registered vehicles, manage the funds from the Dubai International Financial Centre, travelling regularly to countries they invest in.
"We've established these UCITS funds in response to growing demand for high-quality access to frontier markets," said Mohammed Al Hashemi, head of asset management at Invest A.D.
"Global investors are telling us that they want investment vehicles that meet the strictest international regulatory standards, as well as fund managers who are visiting companies and asking the difficult questions -- really kicking the tyres," he added.
In a recent survey of 158 global institutional investors by Invest A.D. and the Economist Intelligence Unit, 51 percent of respondents believed Africa will be the most attractive emerging market for investment over the next decade.
By 2016, all intend to have some investment in Africa, with a third expecting to allocate at least five percent of their total funds to the continent. Currently, almost half of respondents say they have either no exposure, or less than a one percent allocation to Africa.
Invest A.D. intends to continue attracting institutional investors, and plans to also make its UCITS-compliant funds available on fund platforms that target European retail investors. Since their introduction in 1985, UCITS funds have proliferated rapidly and now manage a total of over $7 trillion of assets.
By complying to strict standards set out in the European Union's UCITS IV directive, for example on disclosure and liquidity, asset managers may receive a "passport" to market funds to investors throughout the 27-country grouping.
The UCITS (Undertaking for Collective Investment in Transferable Securities) brand has also caught on globally as a well-supervised financial product, and Asian investors currently account for around 35 percent of net sales of UCITS investment vehicles.