Griffon Starts $108 Million Fund to Invest in Iranian Stocks

  • Tehran-based firm to pitch fund in the U.K. next month
  • Iran has `very compelling' story, Griffon's Malayeri says

Griffon Capital, a Tehran-based firm set up by a group of international and Iranian investors including Xanyar Kamangar in anticipation of Iran’s nuclear deal, is seeking to raise 100 million euros ($108.2 million) by the end of the year for a new offshore fund specializing in the country’s stocks.

Griffon’s Iran Flagship Fund, domiciled in the Cayman Islands, is an open-ended vehicle investing mainly in the Tehran Stock Exchange and Iran Fara Bourse, the company said in an e-mailed statement Monday. Griffon will start pitching the fund in the U.K. next month.

“It’s impossible to ignore a market of this size and Iran has a very compelling story,” Payam Malayeri, Griffon’s head of asset management, said by telephone from Tehran on Sunday.

Iran is opening up to foreign investors after the lifting of international sanctions earlier this month ended a decade of isolation. Last week Charlemagne Capital Ltd. and Turquoise Partners started an institutional fund to buy Iranian securities.

Iran’s stock market is the fifth-largest in the Middle East, with a market capitalization of $90 billion. Inflows may reach as much as $1 billion after six to eight months, according to Reza Soltanzadeh, a founding partner at ACL Assets Management, a firm focused on the country. That compares with $343.5 billion for Saudi Arabia, which opened the region’s biggest stock market to direct foreign ownership last year.

Kamangar, who previously worked for Deutsche Bank AG, started Griffon in 2014 with other investors when Iran was still in negotiations with world powers over its nuclear ambitions. The company also plans to start a private equity fund before the end of the year. Tehran’s agreement last summer to dismantle much of its program led the U.S. and Europe to suspend restrictions on trade and other contacts with Iran in early January.