Europe's largest asset manager Amundi has launched a new fund targeting investment opportunities in markets benefiting from the development of new trade routes across Asia, Europe, Middle East and Africa.
The Amundi Funds New Silk Road aims to provide long-term capital growth above the broader emerging market equity universe, investing in companies which derive substantial revenues in markets and that benefit from new silk road developments. The objective is to have a high-conviction portfolio of 60-90 names. The new fund follows the launch of New Silk Road cross asset solutions, which has attracted more than €459 million since April 2019.
The fund’s name reflects the development of China’s Belt and Road initiative (BRI) in 2013, which was inspired by the ancient Silk Road. China hopes that initiative will act as a catalyst for new trade routes and growth across Asia, Europe, the Middle East and Africa while stimulating economic growth and capital formation beyond the world’s second largest economy. This new eco-system covers more than 65 countries, with €1 trillion of planned investments in 1700 infrastructure projects
Nicholas McConway, head of thematic and concentrated strategies will lead the New Silk Road fund’s strategy team, while Giampaolo Isolani, head of investment solution and market intelligence and Deirdre Maher, head of frontier markets – equity will act as co-managers.
The fund’s investment process is designed to navigate geo-political sensitivities, while integrating top-down analysis with stock picking. The three portfolio managers will be supported by Amundi’s 28 people strong emerging markets equities team, who will generate ideas that fit the fund’s investment themes. This team is part of the Amundi’s broader emerging markets investment platform, which was created in 2011 and manages approximately €45 billion in dedicated emerging markets equity, fixed-income and cross-assets strategies.
Once suitable stocks have been identified, the integration of Amundi’s emerging market macro views combined with further country, sector and style analysis will drive allocations.
Commenting on the launch, Yerlan Syzdykov, global head of emerging markets said: “The Amundi Funds New Silk road aims at investing in the areas associated with the BRI project, rather than investing directly where the BRI invests. We have observed that many BRI projects with potential primary effects may not offer the most attractive investment opportunity. Hence, we are willing to look beyond China and infrastructure to seek out investment opportunities that we believe will benefit from the expected expansion in trade and associated economic growth along the new Silk Roads.”
