Moving Parts
Any excitement about Iran is “premature,” Hans-Henrik Skov, who manages $135 million in frontier markets at Coeli Asset Management, wrote in an e-mail from Copenhagen on Tuesday.
“There are so many moving parts,” Skov said. “So many different interests from the U.S., Iran, Saudi Arabia and Russia are involved that I honestly do not believe any money managers really have a clue what is going on. Forecasting stuff like this is impossible in my world.”
While First Frontier and Charlemagne declined to detail their fund strategy to comply with sanctions, they said they are tying up with local companies to reduce risks.
First Frontier is partnering with Agah Group in Tehran to set up a fund with a basket of 23 stocks. The London brokerage is waiting for regulatory approvals to start the fund, which will exceed $10 million.
“We’ve worked quite hard and for quite some time to figure out how to make it completely compliant,” Nicholas Banszky, chairman of First Frontier, said by phone on April 9. “We had to exclude stocks that are essentially sanctioned.”
Making Bets
The fund may invest in companies such as Iran Khodro Industrial Group, Mellat Bank and National Iranian Copper Industries, according to Alexei Yazikov, head of research at First Frontier in London.
Charlemagne is betting on banks, telecommunications companies and cement makers. The company, with $2.3 billion under management in emerging markets, is working with Tehran- based Turquoise Partners to co-manage a $70 million fund.
“Everything we do, whether it’s before or after sanctions are lifted, will be sanctions-compliant,” Charlemagne’s Bokor- Ingram said. “We want to be ready as soon as sanctions are lifted and not start the process then.”