The First African-focused Mutual Fund

Larry Seruma creates the first actively managed mutual fund focusing exclusively on the motherland

What’s your favorite commodity-based African company right now?
Tullow Oil plc. (TUWOY)
–they have been the most successful oil and gas exploration business in Africa. The investment thesis for this stock is based on the company’s assets in Ghana and Uganda, where the most recent oil discoveries in Africa have been made. The size of the oil finds are estimated at 7 billion barrels of oil available.

The Ghana discovery is jointly owned by three companies: Tullow Oil, Kosmos Energy, and Anadarko Petroleum. They each currently own one-third of the discovery. Additionally, Tullow Oil has another recent discovery in Uganda. It owns 50% of that asset with a company called Heritage Oil.  Now Heritage Oil has recently decided to sell its 50% stake to Tullow, making it the sole owner of that asset. In Ghana they are looking to start pumping out oil by the end of this year. In Uganda it’s going to be 2011. Tullow is positioned to benefit from that given the fact that they are a large holder of those two assets. Their stock price right now does not reflect the value of those two assets.

So as a long-term call, it’s a very good company to own. In addition to that, Tullow continues to explore oil on the rest of the continent. Our 12-month price target is $11.

What’s a good way to capitalize on consumer growth on the continent?
SABMiller plc. (SBMRY) is a South African brewery company that started out in Cape Town and grew its business across the entire continent. It has been very successful at doing that and has since expanded outside Africa—with assets in Europe, the U.S., and Latin America. After this summer, the company is looking to benefit from the World Cup because it sells 90% of all beer in South Africa.

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ACROSS THE WEB
  • Davine Templar

    Excellent. The time calls for us to invest back in our mother continent.

  • Haris Hardaway

    This is extroadinary progress and a venture we all should invest in. China has already established itself on the continent for investments and has capitalized on centuries of Sino-African trade relations. It is time for us to reconnect with the diaaspora and invest in all of our nations with historic african descent like Brazil, Colombia, the Caribe islands and Africa before it is too late.

  • Pingback: The first African-focused mutual fund: Nile Pan Africa Fund – blackenterprise.com | Black News

  • http://www.ggtproduction.org/. COSAUNDRA CHAPPLE

    invest more in education I am 46 year old returning to college Theatre Art

  • David Sanders

    Our community and culture needs to help out africa anyway we can so it won’t run out of resources. Every tree chop down is a environment (dangerous caution) alert we most take seriously. I believe that if our planet have funds going to the right place then we will support the whole entire earth.

  • j

    I may sound like I’m straight out of the 60s but….

    I think we need to build businesses here in United States.

    That would be a mutual fund I could get behind.

    A mutual fund that invest in black owned grocery store chain, factories, warehouses, industrial related business.

    That would generated revenue and provided jobs to African Americans.

    Then apply that incomes and knowledge and apply it to Africa.

  • Patty Jones

    J, You should realize that investing in Africa will lead to job creation in America. Even better it takes less money to start a business there than it does here. As African Americans we should think of ourselves as investors as well as owners and not just employees. Read Thomas Friedman’s ” The World is Flat” and it will help give some perspective of why investing in Africa is the sure step for African Americans. Don’t be left behind in the glabal age.

  • Patty Jones

    J, You should realize that investing in Africa will lead to job creation in America. Even better it takes less money to start a business there than it does here. As African Americans we should think of ourselves as investors as well as owners and not just employees. Read Thomas Friedman’s ” The World is Flat” and it will help give some perspective of why investing in Africa is the sure step for African Americans. Don’t be left behind in the global age.

  • lakesja Strait

    I love it, were so happy about this African emerging mutual fund. I’m new to the investing world other than cd’s bond’s savings…now i’m ready to buy stock. i think this would be a great start and I just wanted some information on how to buy into this mutual fund?

  • http://www.afridocsearch.com David Amakobe

    This is  very encouraging. Besides investing in established multinationals, consolidation and expansion in the healthcare space and retail space is wide open for a continent that is rapidly urbanizing. This should provide capital growth to enable investor to be able to take on the more competitive and capital intensive US.
    J customers in the US do not shop with the store owners in mind, they shop because the store have the merchandise in the right quantities, the right quality, at the time and at the right price. To open a 14,000 sq ft grocery store you may need $10m plus logistics support, with this kind of funding you can open 15 stores and generate more profits in the African space then come back to US with experience and capital!
    You may want to consider campanies like Netcare (www.netcare.co.za), Mediclinics (www.mediclinics.co.za), Shoprite (www.shoprite.co.za) and Safaricom (www.safaricom.co.ke).
    You may also want to encourage consolidation in pharmacies and hospitals
    Well, Well!

  • RGR

    The Pan Africa mutual fund’s web site is http://www.nilefunds.com.

  • Kwaku

    Great article but i should point out that EPACK,Databank Group of Ghana’s flagship mutual fund was the first actively managed fund focused on investments in Africa,this fund was set up in 1996,their website is http://www.databankgroup.com, i hope that helps,but the key here is Africa is where the action is and i for one as an advocate of Pan African investing feels excited and optimistic about the exposure being given the continent by this article,good job Larry,invest where capital is much needed,in Africa.