HSBC Expands Frontier Markets Capabilities

September 11, 2008 ( - HSBC Global Asset Management announced it will launch a Middle East and North Africa fund next month as part of its plans to expand its capabilities in frontier markets.

The HSBC GIF Middle East and North Africa (MENA) Fund will be managed by Andrea Nannini and his team at Halbis, the active management arm of HSBC Global Asset Management.

The MENA fund forms part of HSBC’s flagship Global Investment Funds Luxembourg Sicav and is available to institutional and retail investors, according to the announcement. It is benchmarked against the MSCI Arabian ex-Saudi Arabia Total Return Index and will invest in 50-60 companies in the region with a minimum market capitalization of $100 million.

Countries within this universe include United Arab Emirates, Oman, Kuwait, Bahrain, Egypt, Jordan, Qatar, Lebanon, Morocco, and Tunisia. Up to 10% of the portfolio can be invested in Saudi Arabia.

HSBC said Nannini’s team also manages the firm’s New Frontiers fund which currently has around 45 percent exposure to the MENA region as well as investments in sub-Saharan Africa, Asia, and Latin America. According to the company, frontier markets have gained prominence recently as fund managers look to tap the economic potential of countries in Africa, Latin America, emerging Europe, the Middle East, and Asia while seeking ways to diversify away from troubled western markets.