Former Neptune India and Asia Pacific Opportunities manager Shelley Kuhn has returned to the boutique to run a new African equity fund.
Kuhn, who left Neptune in the summer of 2009 to move back to her native South Africa, re-joined the group in April to run the new specialist portfolio.
Launching on 31 August, the 30-50 stock Neptune Africa fund will follow the boutique's top-down thematic investment process.
Retail investors may be a little wary of investing in an African-focused vehicle, after seeing the demise of the New Star Heart of Africa fund due to severe illiquidity in 2008 and 2009. However, Kuhn says the Neptune fund can avoid many of these dangers with a strong allocation to the highly liquid South African market.
"The frontier sub-Saharan markets have been quite illiquid in the past, especially through the credit and financial crisis. We do not want to encounter liquidity problems so South Africa is going to be a huge focus for the fund," she says.
"A minimum of 50% of the fund will be in South African equities at all times, while it can go to 100% if need be. The South African element is the key difference between this fund and something like the New Star situation. Any large-cap South African stock can be liquidated in a couple hours.
"Outside of South Africa we will still be looking at the larger, more liquid parts of the market. The fund will not be full of Nigerian small caps, for example."
While the fund will have a strong exposure to the more developed South African market, Kuhn says the fund is still able to exploit the growth prospects on the continent.
"Aside from the South African domestic plays, we very much view the country as the gateway to the entire African continent," the manager says.
"Many high quality large South African companies, such as SABMiller, have expansive strategies to tap into this African growth. As a whole, Africa is very much a commodity story. People are starting to realise it is the final frontier for resource exploration."
Africa is currently in the investment spotlight, following Invesco Perpetual star manager Neil Woodford's £25m investment in a Zimbabwe-focused fund earlier this month. Kuhn says she also plans to invest in the country.
"I spent six months travelling around the continent after leaving Neptune and I did see the major improvements in Zimbabwe," she adds.
"Much of this did come with the move to the US dollar, which ended hyper-inflation and somewhat stabilised the economy. I certainly would not pile in, but I am keen to take some positions."
