Carrhae has record month as EM equity funds boom

Carrhae has record month as EM equity funds boom

Posted By Will Wainewright On December 4, 2020 @ 11:00 am In News | No Comments

Emerging markets specialist Carrhae Capital enjoyed the best month in its nine-year history in November, as Covid

vaccine breakthroughs and the US election fuelled a market surge.

Its $274m long/short fund, which started trading at the end of 2011, made 6.1%, putting it up 10.6% for the year,

while its more recently launched long-only fund, which runs $288m, doubled this year’s gain to 22% with a 10.8%

advance.

Founder Ali Akay said the gains came after the portfolio was rebalanced in recent months from being overweight

“coronavirus beneficiaries to the old economy.”

After the long/short fund had losses between August and October, Akay said their conviction paid off in November.

“Market participants acknowledged the strength of earnings growth for some of these companies and digested

details of the $5bn share buy-back program of Naspers as a proactive step to reduce the holding company

discount,” he said.

“This, combined with strong macro tailwinds (conclusion of US elections and announcement of three vaccines)

finally unlocked our portfolio returns, although significantly higher than we anticipated.”

Akay, a former manager with SAC, HBK and Goldman Sachs Principal Strategies, founded the Blackstone-backed

firm in 2011.

Initial data for November suggests it was a standout month for emerging market equity funds, with major indices

rising and $39.8bn of investor capital pouring into EM stocks, according to the IIF.

Carl Tohme’s Cheyne EMEA fund up 5.5% for the month to 27 November, putting it up 6.6% for the year, while

Sloane Robinson’s EM equity fund made 9.3%, putting it up 21% for the year, according to an industry round-up.

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Emma Ball4 December 2020