We are proud to see that our efforts in Africa paying off as the Tundra Frontier Africa Fund now is among the 10% best performing Africa funds globally and awarded a 5-star rating on a 3 year horizon by Morningstar.
Since the relaunch in May 2017, when we broadened the investment mandate, we are pleased to see both absolute performance and relative performance improve dramatically, even though we still have some way before we reach the introduction level of the fund. The weak performance during the funds’ first three years will continue to limit the 5-year rating for some time, but we are convinced and committed to regain that as well in the coming years. The new mandate has given us better flexibility to gain exposure to the growing parts of the economies in Africa. While the long term reasons for investing in Africa remain (structural growth supported by strong demographics, fast growing economies, large population, better political governance etc), one must remember that most countries are young and are still in a buildup phase to create stronger institutions and framework. We believe one has to be selective when investing, not only scrutinizing the companies and the sectors they operate in, but also understand the surrounding macro environment. In the end a lot comes down to finding stocks where growth opportunities outweigh current multiples attached to them (i.e undervalued stocks). We will continue to invest in what we identify as the best ideas available, regardless of weight in indices or how unpopular it is with other investors. We believe this is the way to create strong returns for our unitholders in the long run.