Barclays Unit Sees $100 Million Africa Equity Fund This Year

Absa Asset Management, a Johannesburg-based unit of Barclays Plc (BARC), plans to set up a $100 million fund to invest in African shares, said Managing Director Busisa Jiya.

“We are now at the point where we are speaking with the regulator in South Africa,” he said in an interview in Lusaka, the Zambian capital, on March 8. “The larger the size the better, so I would say we’re looking for at least $100 million.”

Absa is seeking to benefit from the world’s fastest-growing region after Asia, with growth expected to reach 5.8 percent this year, according to the International Monetary Fund’s January outlook. Absa Group Ltd. (ASA)’s purchase of Barclays’ African units will help in setting up the fund, Jiya said.

“It’s not a question of logistically starting from scratch. We have offices, we have staff, we have opportunities, we have insight,” he said. “Our learning curve is going to be a lot faster.”

London-based Barclays agreed to sell most of its African assets to Absa in a $2.1 billion all-share deal that will see the U.K. bank increase its stake in the South African lender to 62.3 percent from 55 percent. The deal was announced in December.

Anchor Investor

Absa Asset Management, wholly owned by South Africa’s third-largest bank by market value, is seeking a single anchor investor in the Africa fund and will later recruit more, said Jiya.

“Over time, as you earn the track record you will be able to attract other clients that have similar investment views on Africa,” he said. The company will then set up a collective investment fund, he said.

JP Morgan Chase & Co. Asset Management’s Africa Equity Fund (JPMAFEA) has risen 11 percent over the past 12 months, in line with the gain in the London’s FTSE 100 Index over the same period, according to data compiled by Bloomberg. Absa’s shares declined less than 0.1 percent to 165.36 rand by 1:37 p.m. in Johannesburg.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net