OREANDA-NEWS. Renaissance Asset Managers (“RAM”), the investment management business of the leading emerging markets integrated investment firm, Renaissance Group, has seen a surge in inflows into its Sub-Saharan Fund, with net flows in the last two months (1 July 2012 to 31 August 2012), outstripping those in H1 by a factor of 7x, based on monthly data.

Following the sustained increase in investor demand throughout 2012, the Renaissance Sub-Saharan Fund (“the Fund”), managed by Sven Richter, Head of Africa and Frontier Markets, is now the largest, and only S&P rated, Sub-Saharan UCITS, at US\\$75.3 million[1]. The flows have originated principally from the UK, Germany and Italy, and from a mixture of investors - institutions, family offices and fund of funds. So far this year, the Fund has delivered a return of 15.4% for institutional investors.[2]

Sub-Saharan Africa is currently experiencing strong economic growth and is projected to outstrip other economies in the emerging and developing world over the next five years - Ethiopia (8.1%), Nigeria (6.8%) and Kenya (6.4%) compared to GDP growth in the U.K. at 2.4%, the U.S. at 2.8% and Germany at only 1.8%[3]. The region has undergone a transformational shift from cyclical to structural economic expansion, driven by an abundance of natural resources, favourable demographics and a growing infrastructure development need. In addition, company valuations are attractive*, inflation has continued to moderate and GDP per capita for many countries in Sub-Saharan Africa is favourable compared to BRICs.

These economic fundamentals have led to a growing middle class in Sub-Saharan Africa and a burgeoning consumer market. Throughout the region, shopping centres and huge supermarkets have been built to satisfy consumer demand, such as Nairobi's Westgate Mall and Lagos' Palms Shopping Centre. More and more people in Sub-Saharan Africa want to keep up with the latest fashion and technological trends, which helps makes the region one of the most compelling investment propositions.

Currently in Europe meeting investors, Sven Richter, Head of Africa and Frontier Markets, said: “Throughout 2012 we have seen rapidly increasing interest in Sub-Saharan Africa, as investors have come alive to the untapped opportunities across the region. A strong macroeconomic environment, supported by rising commodity prices, attractive valuations relative to sustained earnings growth, and a growing middle class, is driving the uptick in demand.”