FCMB launches Alpha fund for investors

AS part of measures to assist investors minimise the volatility of their investments and manage their risks, First City Monument Bank Plc (FCMB) in partnership with International Consortium, has introduced a $100 million multi strategy hedge fund, called legacy African Alpha fund into Nigerian financial markets.

The hedge fund, which is the first of its kind involving a Nigerian institution is being introduced at a period when investors in the Nigerian Capital Market are experiencing volatility in their investments.

Addressing journalists in Lagos, yesterday, the Executive Director, Investment Banking, FCMB Group, Mr. Gboyega Balogun said that the legacy Africa Alpha Fund is a $100 million multi strategy hedge fund focusing primarily on Africa’s high growth opportunities with limited exposure to the middle East and Asia.

According to him, the hedge fund seeks opportunities to reduce risk through hedging strategies by shorting a stock or asset class with a target return of 22 per cent per year in dollar terms on any equity with less than 10 per cent risk or volatility.

The fund, which will be invested exclusively in Africa and Middle East debt and equity will be structured as an absolute return fund. Specifically, a minimum of 70 per cent of the fund will be invested in Africa while a maximum of 30 per cent will be invested in the middle East.

He also noted that International Consortium, which currently manages investments worth over two billion dollars for bluechip financial institutions such as American Express will be providing the funds, which FCMB will sense as advisers in successfully deploying the strategies.

On the strategies involved, Mr. Balogun said that the organisation will observe a top down macro strategy in channelling investments in the country till it reaches the fundamentals.

He said: “We will begin by looking at macro economic story in each country within its universe to decide allocation to these countries after which we look at sectors benefiting or from macro story in favoured countries before filtering down to fundamental analysis on chosen asset class.”

He also added that the fund is only available for institutional and professional investors with limit of $100,000 minimum investment in equities, fixed income and currency.

On its future outlook, Balogun said that the organisation is building a legacy family of funds with long-term security by introducing four more products into the market so as to increase its assets to $500 million in the next 12 months and one billion dollars in the next 18 months respectively.

“Currently, we have two funds launched; Legacy Nigeria Equity Fund managed by CSL and Legacy African Alpha Fund managed by INTIL consortium. We have four more to come in the next 12 months. The franchising model allows us to grow very fast while retaining high quality, top performing managers and consistent governance. We expect to get to over N120 billion assets under management within 24 months, making us; possibly the largest asset manager in the region,” he added.

On its human capital development drive, he said that FCMB and International Consortium are engaging in exchange programmes to ensure that the fund is managed independently by FCMB.—Guardian