Fund manager GQG has amassed a $2.8bn holding in companies in the Middle East and expects to raise this further, while it has cut its position in China to around half that level.
The Florida-based asset manager founded by Rajiv Jain, previously a star fund manager at Vontobel Asset Management, has built up the bet over the past 18 months, spurred on by the “business friendly” approaches of governments in the region and their plans to diversify away from a reliance on oil.
“There are massive privatisation hopes which by definition will open up the economy,” said Jain, whose firm manages $105bn in assets and is well known for a large contrarian bet it took last year on Indian conglomerate Adani. “There’s a real intention to open up and transition away from oil.”
Jain’s investments in the region include a $1bn stake in IHC, the $246bn UAE-listed conglomerate, which he described as a good means of gaining exposure to the strong growth in the region. Last year the Financial Times reported that the company’s highly concentrated ownership made it hard to buy the shares. Jain said the free float provided plenty of liquidity.
GQG’s new interest in the Middle East means its funds now have more money invested there than in China, the world’s largest emerging market. That marks a major change of position from five years ago, when the world’s second-largest economy accounted for 40 per cent of the firm’s emerging markets portfolio.
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