fmg africa fund - presentation

8/8/2019 Fmg Africa Fund - Presentation

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The Fund

FMG Africa Fund

Discla imer : This summary is for information purposes only and does not constitute an offer to sell or a solicitation to buy. Citizens or residents of the United States may not invest in this Fund. Opinions and estimates constitute the managers judgment and are subject to change without notice. Past

performance is not indicative of future results. Investments in emerging markets should be considered high risk where a portion or total loss of capital is conceivable. No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or part of his/her

initial capital, and investment results can fluctuate substantially over any given time period. Please refer to the Funds prospectus which contains brief descriptions of certain risks associated with investing in the fund. Questions should be directed to your local representative or financial advisor. This document may not be reproduced, distributed, or published for any purpose without the prior written consent of the manager.

The last virgin territory


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The worlds first and only Africa focused multi-manager fund. Launched on April 1st, 2007

A diversified Africa fund with exposure to around20 African stock markets. Focus on sub-Saharan

Africa stock marketsInvesting with a range of managers using differentinvestment strategies

The majority of the exposure will be long-only overtime

In contact with more than 80 Africa focused fund

managers and visited over 60 managers sinceinception of the Fund

FMG Africa Fund


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A Huge Continen t

United States

China

India

Europe

Argentina

China 3,705,390

United States 3,618,770

India 1,266,595

Europe 1,905,000

Argentina 1,065,189

11,560,944

Square miles

Africa 11,707,000

Percentage of global resources

Land mass 20%

Diamonds 90%

Gold 50%

Phosphate 90%Platinum 40%

Petroleum 8%

Natural Gas 12%Total

Source: Academic Centre for Education Development

Source: Ayittey, George B.N. Africa Betrayed, 1993,Palgrave Macmillan , ISBN: 0312104006


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Declining Political Risk

Source: Electoral Institute of Southern Africa

Elected governments in 1986 and in 2008

After the African nations gained independence in the 50s and 60s the continent suffered from political instability.Botswana was one of the few countries that at an early stage managed to create a stable democracy and since

its independence in 1966, real GDP growth has averaged almost 10% annually.Political risk in Africa has dramatically declined and set the stage for long term growth

Number of armed conflicts dropped from more than 20 in 1999 to 5 in 2009

Long run civil wars in Angola, Mozambique, Sierra Leone and Liberia have come to an end


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Africa has huge unlocked potentials with an abundance of commodities, a young population of 1 billon,

increasing political stability and better managed economies

Africa accounts for less than 2% to global GDP despite being 13% of the Worlds population and one fifth of the

worlds landmass

Debt/GDP has come down from 70% in the 90s to 20% recently, FX reserves have risen from virtually nothing

to more than $50bn in a few years, has outpaced world GDP growth since 2001, FDI have increased from around

$10bn in the 90s to $60bn in 2008

The International Energy Agency (IAE) predicts that sub-Saharan oil revenues will rise from the current $80bn a

year to $250bn a year by 2030. They estimate total revenues over the period at $4.1 trillion

IEA predicts that Africa will overtake Russia in terms of gas exports to EU by 2030

BRIC-African trade has increased from $16bn in 2000 to a staggering $157bn in 2008, a compound annual

growth rate (CAGR) of 33%

Stock markets have historically low correlation both intra Africa and Africa versus emerging markets

Africa is the last sizeable and investable virgin territory left for investors. Today only 1% of world market

capitalization

The Opportuni ty

Source: African Development Bank, IMF, Bloomberg


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There are 25 stock markets in Africa ranging from start ups like Rwanda and Libya to the more established likesof Egypt (1888) and Johannesburg Securities Exchange (1887)

Africas total stock market capitalization is around $400bn which equals approx. 1x Exxon Mobil, or half of Zurichs SXE. So thats 53 countries, 1bn population, land mass 3x the size of US, 1500+ listed stocks valued asone US stock

South Africa is by far the largest market and accounts for around 60% of stock market capitalization. Turnover in African markets (ex. SA) increased from $7bn in 2004 to $70bn in 2007

25 African Stock M arkets = 1x Exxon M obil?!

Source: Bloomberg


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A study by the UN shows that at the end of 2008 there where 4.1bn mobile subscribers in the world, up from1bn in 2002. Africas user rate is up from 2% in 2000 to 28% in 2009 which equals 280 million subscribers

Africa's Internet user rate increased 1,031% between 2000-2008 compared to a world growth rate of 306%. Thecontinent's Internet users reached 51 million in 2008 which equals a penetration rate of 5% today, compared toa global penetration rate of 22%

African Development Bank and the International Telecommunication Union have partnered together and pledgedto connect all African capitals and major cities through broadband infrastructure by 2012

The mobile phone is creating virtual infrastructures:

Grow ing Connectivity

Prepaid mobile phones double as bank accounts for those without banking affiliations

Kenya Power & Light can bring electricity to shanty towns thanks to the possibility ofcharging customers through their mobile phones

Commerce is fostered through rapid dissemination of information

Studies show that 20% of a population has the ability to exchange news and ideas throughaccess to cell phones and text messaging

Source: Internet World Stats,


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China has signed bi-lateral trade agreements with 48 Africa countries (out of a total of 53) and loan agreements

with 22 countries

The first region in the world to offer free, mobile roaming services across several countries

Only 8 out of 53 countries have a more than 40% commodity distribution to GDP

The cost of land in Argentina, Brazil and in USA is approximately 7x the cost of land in southern Africa

Sub-Saharan Africa has a total arable area is 167m hectares (5x the size of Germany), of which only 28mhectares are currently in agricultural production. Of this less than 3% of the farmed area is irrigated, despite a

total of 53m hectares of available inland water

Around 70% of the population have an income of less than $2 a day

After the Nigerian military handover took place in 1999 the Nigerian All Share Index jumped from 5000 points to

50,000 points in 2007. Annual turnover grew from virtually nothing to $17bn in 2007

Almost 59 million Africans participated in the Presidential Elections held in 10 countries in 2006. This equals a

67% turn out rate which can be compared to 60% in the US

Did You Know

Source: African Economic Outlook, Africa Invest Fund Management, IMF, Bloomberg


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AsiaCharles Cantlie & Jeffery ShenTel: +44 20 7581 3149Fax: +44 20 7584 5484e-mail: [email protected]: [email protected]

Middle EastErik HultsbergTel: +46 8 545 06 180Fax: +46 8 545 06 189e-mail: [email protected]

MaltaErik Nelson & Mark MalliaTel: +356 21314011Fax: +356 21312880e-mail: [email protected]: [email protected]

Fund AdministratorApex Fund Services (Malta) Ltd., Floor 6, Airways House, Gaiety Lane, Sliema, SLM 1549, Malta

Tel: 356 2131 1330 - Fax: 356 2131 2880 - e-mail: [email protected]

www.fmgfunds.com

FM G - M arketing Contacts

EuropeJohan Kahm & Fredrik EdensvrdTel: +46 8 545 06 180Fax: +46 8 545 06 189e-mail: [email protected]: [email protected]

UK

Charles Cantlie, Avon Cayzer & Francis SalvesenTel: +44 20 7581 3149Fax: +44 20 7584 5484e-mail: [email protected]

e-mail: [email protected]: [email protected]

ScandinaviaFredrik Edensvrd & Karl GrewinTel: +46 8 545 06 180Fax: +46 8 545 06 189e-mail: [email protected]: [email protected]

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fmg africa fund - presentation

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