Franklin unveils fund focussed on Mena region

Zaid Makkawi of Algebra Capital

Franklin Resources said yesterday it was launching a new fund investing in the Middle East and North Africa, joining a growing number of money managers offering special products geared to the energy rich region.

The Franklin Mena Fund will invest in markets including Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, Oman, Egypt, Jordan and Morocco. The fund is not expected to allocate more than 40 per cent of assets to a single country in the region.

San Mateo, California-based Franklin, which operates as Franklin Templeton, said the fund will be managed by Stephen Dover but sub-advised by Algebra Capital, a Dubai-based fund manager in which Franklin acquired a 25 per cent stake last August.

Algebra Chief Executive Ziad Makkawi said in a statement that while high energy prices have boosted growth in the region, its economies were diversifying and it was also supported by a young population. "The Mena region represents one of the great frontier market investment opportunities, offering the potential for long-term growth and low correlations with other markets," the statement said.

The fund is being rolled out in Hong Kong, the Middle East and UK.

Rival fund houses Fidelity and Schroders launched similar Mena-focused funds in Hong Kong last August, making the case that Asian investors would benefit from the diversification.