BlackRock unveils frontier markets investment trust

BlackRock is launching a frontiers investment trust which will target markets including Kuwait, Oman, Saudi Arabia and Tunisia.

The trust will target the 140 countries currently classified as frontier markets, which BlackRock says have some of the fastest rates of economic growth in the world.

The launch comes after Money Marketing, Fund Strategy’s sister publication, revealed in October that BlackRock was hosting a nationwide investment trust tour to boost its focus on the funds.

The group stresses the trust will be for sophisticated private investors and institutional players only, and the shares it places will be sold via intermediaries and institutions and not directly.

The trust will be managed by Sam Vecht, who also heads the group’s open-ended Emerging Markets fund. (article continues below)

Vecht says: “Frontier markets have the capability to significantly outperform in the next five years. Market performance in the last 18 months has lagged both developed and emerging markets, allowing for greater investment opportunity. Added to this, few research analysts cover frontier markets, providing opportunities for fund managers to exploit market inefficiencies and add alpha.”

The fund will charge annual management and administration fees of 1.1% and a performance fee of 10% of outperformance of the MSCI frontier markets index.

The performance fee will be capped at 2.5% of assets under management in years of positive returns and 1% of assets in years where losses are made.

The share placing has kicked off already and closes on December 10, with dealing beginning on December 17.