Permal fund takes the Silk Road
Dubai, October 31, 2007
Permal Group, one of the largest fund of hedge funds organisations in the world, has launched the Permal Silk Road Fund.
It is an emerging markets fund of hedge funds, which focuses on many of the markets that made-up the ancient Silk Road.
Permal Silk Road covers a wide geographical area and includes the Middle East and Northern Africa (Mena), Asia (excluding Japan), Commonwealth of Independent States, and Turkey. Target markets include those that have experienced recent rapid economic development, through petrodollars, hydrocarbons, consumer goods and technologies.
The fund will invest in a minimum of 20 underlying fund managers, with allocations to event driven, equity long/short, equity long-only, macro and fixed income strategies.
But what differentiates the fund from other emerging market funds, is the focus on markets that have to date seen relatively little foreign investment, said a spokesman.
The new Silk Road countries are rich in natural resources, with more than 80 per cent of the world’s proven oil reserves, and this has been a catalyst for much of the current growth, largely driven by strong demand from China and India. They are also benefiting from favourable demographics, with young and rapidly growing urbanised populations.
This economic growth has led to a significant transformation of their capital markets, attracting domestic and foreign investment in private and public markets; while regulatory bodies have been established in many centres, providing an additional safety blanket and further encouraging foreign capital, he said.
Other attractions to these regions include:
* Some of the last untapped, high growth markets left for global investors;
* Very low correlation to the rest of the world;
* Strength of the economic fundamentals, with some of the highest GDP growth rates in the world, on some of the highest capital account surplus/GDP ratios
* High degrees of market volatility, creating significant investment opportunities.
Permal Silk Road Fund is registered in the British Virgin Islands and will be launched on November 30, in partnership with Credit Suisse, which has exclusive distribution rights for the first six months.
Isaac Souede, Permal’s chief executive officer, commented: “The Silk Road conjures up evocative images of ancient Eastern markets and the early traders. This was the emerging market opportunity of its day. Over the past decade these regions have undergone economic transformations, staking their places as the new emerging markets. With significant capital inflows, improved economic infrastructures, and strengthening oil prices, the investment potential is immense.
“We are seeing the best hedge fund managers look at these markets, as they scour the world for untapped investment opportunities. They recognise that the opportunities are immense - and the timing is good - made more so by the shifting balance of power from the more developed economies towards these exciting emerging economies.”
Michael Philipp, chairman and chief executive officer of Credit Suisse for the Europe, Middle East and Africa (EMEA) region, said: “We are delighted to be working in partnership with Permal on the Permal Silk Road Fund. Credit Suisse is committed to the emerging markets core to the Fund and we look forward to providing our clients access to these important growth markets.” – TradeArabia News Service