Silk Road Management has launched a new hedge fund focused on three countries more likely to be missed on a map than to feature in a portfolio.
The Silk Road M3 Fund will focus on Mongolia, Myanmar and Mozambique. Silk Road, which invests in emerging and frontier markets, said the three countries should be among the fastest-growing economies over the next decade, as their formerly socialist governments open their economies.
The three countries also have large pools of untapped resources and strong economic links to the great emerging-market success stories of Brazil, Russia, India, China and South America. Silk Road said annual growth should be in the double-digits for the next 10 years.
"The governments of Myanmar, Mongolia and Mozambique are committed to developing functioning local stock exchanges which would spur active participation of international investors in domestic capital markets," Silk Road said. "Interestingly, M3 countries are uncorrelated, therefore, the diversified investment portfolio with exposure to M3 countries would benefit from a very low level of correlation between individual countries."
"Myanmar, Mongolia and Mozambique share some striking similarities and we are confident that their economies will be among the world's fastest growing in the next decade and offer outstanding opportunities for investors," Silk Road managing partner Alisher Ali said. "Our M3 Fund is the world's first investment product offering investors an early, diversified portfolio exposure to these three resource-rich frontier markets."
M3 will invest in internationally-listed companies with assets and operations in the three countries. The firm will market the product to international investors, including family offices, funds of hedge funds and high net-worth individuals.