•  A specialist team with deep experience and a strong long-term track record in African frontier markets
• Disciplined management of key frontier risks, including currency, liquidity, and repatriation
• Direct engagement with local market participants to understand country-specific nuances
• Old Mutual’s role as anchor investor provides scale, stability, and cost efficiency

The strategy is benchmarked against the Standard Bank Africa ex South Africa Sovereign Bond Total Return Index and targets outperformance of 1% over rolling three-year periods. Performance has tracked slightly ahead of the benchmark, reflecting a disciplined approach to risk, opportunity and capital preservation.

Currency performance and convertibility are critical drivers of returns in frontier markets. Our process prioritises hands-on insight gained through country visits and engagement with regulators and local participants. This real-world understanding allows us to identify opportunity and manage risk even in volatile conditions, uncovering value that desktop analysis alone cannot achieve.

Our hybrid core-satellite approach balances resilience and return potential. The core portfolio focuses on sovereign and select corporate Eurobonds to reduce currency risk. Satellite exposures include short-duration local currency bonds for liquidity, currency derivatives as yield enhancers, and structured portfolios to hedge and access constrained markets. This flexible structure allows us to pursue opportunity while managing downside risk with discipline.

• Strong performance relative to benchmark, local as well as international peers, which comes from stock selection, forex analysis and cash management
• Our robust process allows us to assess investment ideas across approximately 16 African countries and currencies
• Currency management is integrated throughout our process
• Old Mutual, as the largest investor in this strategy, is reassuring to investors as returns are unlikely to be impacted by a large withdrawal

The strategy is benchmarked against the MSCI Emerging Frontier Market Africa ex SA Index and focuses on those companies where we have actively engaged with management. Our goal is to create a portfolio that delivers outperformance, builds long-term capital for our clients and with less risk.

Our process focusses on building a portfolio of undervalued stocks with a preference towards stocks paying dividends and stocks generating higher returns. Our research follows a disciplined and structured approach to fundamental analysis to identify and exploit market inefficiencies and extract alpha. Given that the Old Mutual African Frontiers Strategy invests in multiple currencies and countries, we do bespoke analysis to understand country and currency risk to avoid capital loss. We believe that a portfolio manager skilled in controlling overall strategy risk generates enhanced risk-adjusted returns for clients.

Our high-conviction approach filters a universe of 1 000 companies to focus on around 200 shares with liquidity and accessible data. Idea generation combines country and currency analysis, proprietary rankings, sector analysis, and direct company visits. In portfolio construction, we assess upside potential, liquidity, sector/country exposure, and benchmark weighting. Risk management is integral, emphasising liquidity, currency management, and diversification. The goal is to build a portfolio that outperforms the market, growing long-term capital for clients with reduced risk.