Investing in Africa
Global investors can no longer afford to ignore the growth of Africa. The total economic output of Sub-Saharan Africa is predicted to reach over $2 trillion by 2020, up from just $300 billion in 2000. Pro-market economic reforms, favorable demographic developments, and the adoption of new technologies also contribute to a steadily improving investment environment.
The rise of the middle class is also likely to boost returns in Africa over the next several decades. IFC expects Africa’s combined middle and high-income groups to reach 160 million people by 2030. That’s an increase of about 100 million, more than the entire population of Germany.
market reforms and strong demographics
Why invest in East Africa?
In 2019, Kenya's economic growth averaged 5.7%, placing Kenya as one of the fastest growing economies in Sub-Saharan Africa.
The growth is mainly attributed to the improvement of Kenya’s traditionally strong sectors, including tourism and agriculture.
Many of the countries in East Africa have a democratic government with a good business climate for foreigners.
Kenya has a tradition of being a commercial hub in the East Africa region.
A multi-strategy investment fund focused on Africa
Portfolio manager Joel Mwaura uses a value investment strategy to identify undervalued securities trading on the regional stock exchanges. The portfolio also invests in special situations in specific securities. Often, these ideas are related to land disputes, corporate actions, or similar catalysts.
The portfolio will also make both private equity and debt investments in privately-held companies across the region. The investments will target private school education, real estate, and agricultural products including coffee, macadamia, and avocados.
Africa Frontiers Fund
Fund Overview
A multi-strategy framework that identifies undervalued, niche investments in East Africa
Focused on East Africa with a special interest in Kenya
Seeking attractive valuations, with a moderate level of quantifiable downside risk
Liquidity and capital safety will be of paramount importance
Africa Frontiers Fund
Investment Strategy
A local network of attorneys, accountants, and entrepreneurs is used to identify niche, small-cap, and event driven opportunities across Kenya and East Africa.
Specializes in finding attractive, fast-growing companies that are trading below adjusted book value
Kenya focused, but will also seek opportunities across East Africa
Gives investors access to one of the fastest growing markets with good corporate governance
Additional alpha created through unique special situations
Africa Frontiers Fund
Fund Target Allocation
Public equities, government bonds, and real estate assets will make up the largest holdings (50% to 75%)
Government privatizations in power, healthcare, and municipal infrastructure (25% to 50%)
Event-driven special situations on the Nairobi Stock Exchange (up to 10%)
The Africa Frontiers Fund offers investors the opportunity to access the rapid growth of the East African economy.
Fast Growing Demographics
Fundamentals for real estate remain strong
The rapidly rising population in Kenya, including a growing middle class and rural-urban migration, have supported the strong backdrop for the real estate market.
Poor infrastructure is a major obstacle to growth in most emerging markets. It limits opportunities, creates inconveniences, and sustains high costs for basic services.
Country needs financing to maintain existing infrastructure and to make significant new investments to fuel growth and lift people out of poverty.
We expect government privatizations of vital infrastructure including ports, highways, and power plants to provide opportunities for investors.
The African Development Bank is also active in providing financing structures and vehicles to support direct investment.
middle class population driving domestic demand
Strong fundamentals for agriculture
We expect an increase in the demand for Kenyan macadamia nuts in the domestic market.
More aggressive marketing efforts internationally, the trend toward nuts and healthy eating, and rising incomes have driven sales in China, Europe and the US.
Due to the current high demand for the Macadamia nuts and the expected increase in its demand, there has been a deliberate effort to increase productivity.
Infrastructure Opportunities Remain Robust
Infrastructure projects offer strong returns
Kenya already has an impressive record for developing its infrastructure and power system.
Although it is still a frontier market, Kenya’s road quality is above average at 61 out of the 140 nations evaluated by the WEF.
Some parts of Kenya are semi-arid and lack access to the electrical grid. They would benefit significantly from solar-powered water pumps.
Road quality in Kenya is similar to South Africa but Kenya’s road connectivity remains dramatically lower.
Kenya’s road connections to the rest of Africa must be improved to take full advantage of the African Continental Free Trade Agreement (AfCFTA).
Prudent Risk Management
Joel Mwaura, Portfolio Manager
Joel is an experienced accountant who has worked for Big Four Accounting firms for five years as a member of financial services audit teams for commercial banks, investment companies and pension funds.
He is a member of The Institute of Internal Auditors (The IIA) and Global Association of Risk Professionals (GARP).
An investor should consider the fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information about the fund can be found in the fund’s prospectus, or, if applicable, the summary prospectus. Any decision to invest in Ashton Global funds should be made on the basis of the current prospectus, which is available on request at info@ashtonglobal.com. Read the prospectus carefully before investing. All investing involves risk, including potential loss of principal. There is no guarantee that the fund will achieve its objective.
Direct Lending
The fund seeks to provide short-term working capital and growth financing to SMEs operating in developing markets. We have a four pillar investment strategy focused on disciplined underwriting, better structuring, intensive loan monitoring and risk mitigation.
Litigation Finance
Litigation finance is still a relatively new asset class with room for growth. Cases frequently take three to five years to reach a settlement, and the secondary market is still developing. The growing popularity of litigation finance has been fueled by billions of dollars from hedge funds, private equity and other institutional investors.
International Small-Cap
The deep-value tilt to our investment strategy lowers portfolio volatility
The Ashton Global International Small Cap Fund seeks to generate strong returns by investing in undervalued small-cap and early stage companies across emerging Asia. With a concentrated portfolio of public and private securities, the fund has delivered strong returns since its inception in 2014.
