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Africa Opening thelast frontier market
September 2008
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Africa Opening the last frontier
marketPresentation to the Securities &
Investment Institute CPD Seminar
23 September 2008
Dr Ayo Salami
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AfricaMoving from promises to results
Africa is indeed on the move. In contrast with the 1990s, conflicts in Africa havedeclined, economic performance has improved and some clear high performers arebeginning to emerge.
World Bank 2006
Africa has learnt to trade more effectively with the rest of the world, to rely more on theprivate sector, and to avoid the very serious collapses in economic growth thatcharacterized the 1970s, 1980s and even the early 1990s.
World Bank 2007
Since 1995 there has been at least one African equity market among the top 10 bestperforming markets in the world. Last year (2007), it was Zambia, posting gains of 127%in US dollar terms. Joining Zambia among the best performing markets was Malawi (up114%), Cote DIvoire (up 105%) and Nigeria (up 90%). In 2006, Malawi was the best
performing stock market in the world posting gains of 129% in US dollar terms.African Business Research Limited
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Africa
A Lie by Omission
Why invest in Africa?
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Misconceptions about Africa
Investing in Africa is risky
The region is a basket case that is politically unstable
Regulations are insurmountable
There are no investment opportunities
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The view from abroad :
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Africa in Perspective
Global Land Mass and Proportion of Worlds Resources
Square Miles:
China 3,705,390
United States 3,618,770
India 1,266,595
Europe 1,905,000
Argentina 1,065,189
New Zealand 103,736
Total 11,664,680
Africa 11,707,000
Proportion of globalresources in Africa:
Land Mass 20%
Diamonds 90%
Gold 50%
Phosphate 90%
Platinum 40%
Petroleum 8%
Natural Gas 12%
Source: Academic Centre for Education Development
Source: Ayittey, George B.N. Africa Betrayed, 1993, Palgrave Macmillan , ISBN: 0312104006
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Political Overview
Source: Duet, African Business Research
Wind of change blowing across Africa declining political risk
CurrentCirca.1980
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Macro Overview
Source: World Bank Data
Population and GDP Growth (Sub-Saharan Africa ex South Africa)
12 consecutive years of growth in real per capita CDP
-4.0%
-3.0%
-2.0%
-1.0%
0.0%1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
2006
E
2007
E
2008
E
Population (grow th) Grow th in real GDP Grow th in real per capita GDP
Since 1995, Real GDP
growth has exceeded
population grow th
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0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005 2006 2007 2008
%Chang
eRealGDP
World G7 Countries Sub-Saharan Africa
Developing Asia Middle East Newly Industrialised Asia
Macro Overview
GDP Growth across the world
African growth is now among the highest in the world
Source: World Bank Data
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Some out-performing economies
Angola 15.9 %
Sudan 12.6%
Equatorial Guinea 10.0%
Nigeria 9.0%
Uganda 7.1%
Mozambique 7.0%
Rwanda 6.0%
Botswana 4.9%
Source: World Bank Data
2008 Forecast growth in Real GDP
Macro Overview
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Sound monetary policies .
Source: World Bank data
12
-3.5%
-1.5%
0.5%
2.5%
4.5%
6.5%
8.5%
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Deficitas%ofGD
P
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Budgetdeficit(US$bn)
Budget Deficit (US$ billions) Def icit Including Grants as % of GDP
Deficit Excluding Grants as % of GDP
Macro Overview
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have controlled money supply and reduced inflation
Source: World Bank data
13
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06E
20
07E
20
08E
20
09E
Inflation(%)
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Moneysupply(%
Year-On-Year % in price index Growth in money supply Ratio of money supply to GDP
Macro Overview
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External debt is becoming sustainable
Source: World Bank data
14
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006E
2007E
2008E
2009E
DebtServ
icetoExportsRat
io(%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Extern
alDebtas%ofGD
Debt service to exports ratio External debt as % of GDP
Macro Overview
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With a little help from our friends in China
As the Chinese economic
resurgence has proceeded,Africa has become more
important for China as a
source of the raw materials
needed by the Chinese
manufacturing sector.
African economies, inparticular oil and
commodity producers have
benefited substantially from
Chinas demand for raw
materials
The historical trade deficitwith Chinas has now
become a surplus
Source: WTO Direction of trade statistics
0
2000
4000
6000
8000
10000
12000
14000
16000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
USDollarmillions
China Imports from Africa China Exports to Africa
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Macro Overview
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Correlation with other global markets
Correlation matrix between regional equity markets
Africa Asia
Emerging
markets Far East G7 Countries
Latin
America
South
Africa
World
Index
World Small
Companies
Africa (ex South Africa) 100%
Asia -9% 100%
Emerging markets -7% 88% 100%
Far East -10% 99% 86% 100%
G7 Countries 12% 18% 43% 17% 100%
Latin America -14% 6% 44% 5% 57% 100%
South Africa 3% 42% 58% 40% 22% 7% 100%
World Index 14% 21% 46% 20% 99% 57% 24% 100%
World Small Companies 14% 22% 46% 21% 90% 46% 28% 90% 100%
Correlation coefficients based on daily equity returns between 1/1/2000 and 29/09/2006
Source: MSCI, African Business Research
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Low correlation with other global markets offersdiversification opportunities
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-25%
-20%
-15%
-10%
-5%
0%
5%
10%
West
Africa
Sub-S
aharanAfrica
Africa
(ex-SAfrica)
EastA
frica
North
Africa
South
ernAfrica
India
Japan
China
Asia
FarEast
Germ
any
UnitedStates
G7Index
World
Index
Europ
e
Russia
UnitedKingdom
Easte
rnEurope
EmergingMarkets
South
Africa
Latin
America
Brazil
Anybody heard of Sub-Prime?
USD Returns to various equity markets over the period 19 July to 15 August 2007
On July 19, 2007, the Dow Jones Industrial Average hit a record high, closing above
14,000 for the first time. By August 15, the Dow had dropped below 13,000 and the S&P
500 had crossed into negative territory year-to-date.
The correction in
global equity
markets following
the sub-prime crisis
had minimal impacton Africa
Source: MSCI, African Business Research
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Correlation with other global markets
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-10%
-8%
-6%
-4%
-2%
0%
2%
4%
NorthA
frica
WestA
frica
Africaex-SAfrica
Sub-Sa
haranAfrica
Southe
rnAfrica
Japan
USA
G7Cou
ntries
WorldI
ndex
Europe
EastAfrica
United
Kingdom
LatinA
merica
Germany
Brazil
FarEast
Asia
EmergingMarkets
India
EasternEurope
Russia
SouthAfrica
China
USD Returns to various equity markets over the 2 week period 26 Feb to 9 March 2007
The sell-off in
global equity
markets following
the correction in
China in February
did not affect Africa
On February 27, 2007, the Shanghai index plunged 8.8%, its biggest one day drop in a
decade following rumors of the introduction of capital gains tax on equity investments.
Over the next two weeks, most global markets followed with sharp declines.
Source: MSCI, African Business Research
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Did you say something happened in China? Sorry we missed it!
Correlation with other global markets
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African Equity Markets
From Cape to Cairo
There are 22 stock exchanges in Africa
with a combined market value of
US$670.8 billion and 2,090 listedequities
Data as at 31 August 2008
Market ValueNumber of
listed companies
Sub-SaharanAfrica (ex SA)
South Africa
551
427
$129.2 bn
$339.9 bn
North Africa 1,112$201.7 bn
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Trading and settlement
12 countries (94% of the stock
markets ex South Africa)
have electronic and automated
trading platforms. More
countries are already planning
a switch over.
Also more markets are moving
towards the international
standard of t+3 settlement
cycle
20
Country Trading system Settlement cycle
Central
depository
Algeria Electronic t+5 YesBotswana Call over t+5 yesBRVM Electronic t+5 Yes
CameroonCape VerdeEgypt Electronic t+2 for active shares Yes
t+3 for dematerialised sharest+4 for physical shares
Ghana Call over t+3 yesKenya Electronic t+5 Yes
Malawi Call over t+7 yesMauritius Electronic t+3 YesMorocco Electronic t+3 yesMozambiqueNamibia Electronic t+3Nigeria Electronic t+3 YesSouth Africa Electronic t+3 yesSudan
Swaziland Call over t+5Tanzania Electronic t+3 yesTunisia Electronic t+3 yesUganda Electronic t+5Zambia Call over t+5 yesZimbabwe Call over t+7
Love thy neighbour but dont take counterparty risk
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0 2 4 6 8 10
12
14
SouthAfrica
Egypt
Nigeria
Morocco
Kenya
CoteD'Ivoire
Mauritius
Tunisia
Zimbabwe
Botswana
Zambia
Ghana
Malawi
Uganda
Tanzania
Namibia
Natural Log of market size (US$ million)
$339.9 bn
$81.3 bn
$76.4 bn
$14.4 bn
$7.3 bn
$5.5 bn
$5.3 bn
$4.9 bn
$4.5 bn
$4.2 bn
$2.8 bn
$1.5 bn
$1.1 bn
$0.85 bn
$0.57 bn
$120.1
Sizem
atters?
Market
valuesofstoc
kexchangesinAfrica
Da
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There is a good distribution of economic sectors
22
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Banks
Telecom
Construction
Food
Conglo
merates
RealEstate
Oiland
Gas
Enterta
inment
Finance
Chemic
als
Insuran
ce
Agriculture
Health
Transportation
Manufacturing
Utilities
Consum
erGoods
Mining
Retail
InfoTe
chnology
Service
s
Autos
Media
Africa (ex South Africa)
Data as at 31 August 2008
Jointly, banks, construction and consumer goods companies represent 70%of the total capitalisation of sub-Saharan African equity markets ex South
Africa.
One of the least known open secrets of the investment world is that African
banks are among the most profitable in the world with average ROE above
30%.
The high proportion of telecom companies reflects Africas status as the
fastest growing telecoms market in the world. The average mobile phone user
in Nigeria spends US$22 per month nearly double that of a Chinese user.
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-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Avera
g
e
African equity markets Great returns
Annual returns to Sub-Saharan Africa equity markets (ex South Africa) over 1995 2007
Source: Local Stock Exchanges, African Business Research
Average annual returns of 11.5% (in US$) over the last 12 years from Jan.
1995 to December 2007, relative to 8.8% for SA, 6.3% for G7 countries and
6.6% for the All Global equities markets.
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0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
La
tin
Ame
rica
Eas
tern
Europe
Su
b-
Saharan
Africa
SouthAf
rica
Emerging
Markets
G7
Coun
tries
Asia
Far
East
Equity returns among the best in the world
Average annual returns to various regions (1995 to 2007)
Source: MSCI, African Business Research
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-15%
5%
25%
45%
65%
85%
105%
125%
Zambia
Malawi
BR
VM
Nigeria
Mauritius
Nam
ibia
Botsw
ana
Zimb
abwe
G
hana
Ug
anda
Kenya
Swaz
iland
Avg(exSAfrica)
2007 Another Vintage year
US$ Returns to sub-Saharan African equity markets
Source: Local Stock Exchanges, African Business Research
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-20%
30%
80%
130%
180%
230%
280%
330%
380%
430%
480%
1
994
1
995
1
996
1
997
1
998
1
999
2
000
2
001
2
002
2
003
2
004
2
005
2
006
2
007
Cumula
tive$returns(%)
-65%
-55%
-45%
-35%
-25%
-15%
-5%
5%
15%
Annual%lossoncurrency
Annual % loss on currency Cumulative $ returns
Despite currency
depreciation,
cumulative $returnsare positive averaging
12% per annum
Lose on the currency swing
Gain on the growth roundaboutSub-Saharan Africa equity returns in US$ since 1994 (excluding South Africa and Zimbabwe)
Source: Local Stock Exchanges, African Business Research
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
NorthAfrica
Eastern
Euro
pe
FarEast
Asia
Latin
America
Eme
rging
Mar
kets
SouthAfrica
Sub-Saharan
A
frica
WorldSmall
Com
panies
G7C
ountries
44%
37% 36% 35% 35%31%
30%
19%18%
23%
What about volatility?
Give a dog a bad name
Standard deviation of annual returns (1995 2007)
The risk from
investing in Africa
is similar to that of
other emerging
markets.
The perception
that Africa is
inherently riskier
is not supportedby data
Source: MSCI, African Business Research
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0.0%
5.0%
10.0%
15.0%20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
W
orldSmall
Companies
NorthAfrica
La
tinAmerica
Eastern
Europe
Sub-Saharan
Africa
G7Countries
SouthAfrica
Emerging
M
arkets
Asia
FarEast
50% 41% 39%38%
35%32%
25%21%
-2%
3%
Risk Return Ratio
How Sharpe is that?
Sharpe ratio for Sub-
Saharan Africa is 1.5x
better than for
emerging markets
generally
Source: MSCI, African Business Research
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0
10
20
30
40
50
60
Asia
G7Countries
FarEast
World
Index
SSA
(ex-
South
Africa)
Easte
rn
Europ
e
Emerging
Mark
ets
LatinAmerica
Numberoflosingmonths
0%
5%
10%
15%20%
25%
30%
35%
40%
45%
50%
Riskofloss
Number of losing months Risk of loss
49 48 47 346 4440
38
37
Risk of Loss
Number of losing months (Jan 2000 to August2008, 104 Months )
Risk of Loss for Africa is similar to other regions of the world
Source: MSCI, African Business Research
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You think I am a loser, wait till you meet my siblings
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-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
WorldIndex
G7Countries
Africa(exS
outh
Africa)
Asia
FarEast
EmergingM
arkets
SouthAfric
a
LatinAmerica
EasternEu
rope
Lowest Monthly Return Highest Monthly Return
Historic Value At Risk
Always look on the bright side of life
Outside the developed world, Africa has the lowest Historic VARSource: MSCI, African Business Research
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-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
2000 2001 2002 2003 2004 2005 2006 2007
AnnualTra
dedVolume(US$billion)
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Tu
rnoverRatio(%)
Annual Traded Volume Turnover ratio
Trading Liquidity
Annual tradedvolume has
increased by
25x since 2000
Source: Local Stock Exchanges, African Business Research
31
Spreading equity culture reflected in rising turnover
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Investment strategies
Key sectors for equity investors
Banks
Telecoms
Breweries
Construction and cement
Consumer goods
Increasing number of investment vehicles are becoming available. In the last 3
years about 10 new Africa focused funds have been launched
Research can be challenging but fun
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Dynamics of economic reform
Cost of input
Ex
pectedOutput
Public sector output
Private sector output
Total output
Source: Olivier Blanchard; The Economics of Post-Communist Transition
X
Africa is just beginning to
realise the benefits of the
economic restructuring of the
1990s.
Africa has had the pain, the
gains are about to become
evident
15 years ago, Africa would not
have been able to cope with adoubling of energy prices.
Despite recent doubling of oil
prices few African countries
have required balance of
payments support from the
IMF.
The continent is less
vulnerable to external shocks.
We believe Africa is
positioned here on
the growth curve
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Would you invest in these countries?
A country recently endured a long and bloody civil war, the
assassination of its president, a financial panic and an influx of
poor immigrants
A country formed from the ruins of a vanquished army forced
from its historic homeland to a small barren island
A country divided after a long and destructive civil war and
still technically at a state of war
A country that started a regional war, suffered a humiliating
defeat, heavy bombing that destroyed its infrastructure andwithout a history of civil liberties or democratic government
United States
of America
Taiwan
Korea
Japan
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Duet: Who are we?
We are farmers not hunters
DUET GROUP
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Duet Group is a client-focused financial group specialising in Alternative Asset Management that is
dedicated not only to generating superior investment returns, but also to delivering riskmanagement, transparency and client service required by sophisticated investors.
Duet Group was founded by Henry Gabay & Alain Schibl in June 2002 in London.
Osman Semerci joined Duet Group in April 2008 as Chief Executive Officer and Managing Partner.
As of 1st July 2008 Duet Group has USD 1.8 billion of equity under management.
DUET GROUPOverview
DUET GROUP
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37
Duets primary focus is its clients needs. It strives to understand their individual investmentobjectives.
Values such as integrity, fairness and transparency ensure its reputation. Through thesequalities it looks to build solid, long-lasting relationships with its clients.
Through commitment and respect to its people Duet aims to create a close, collegial working
environment. This is essential to produce optimum results from its individual team membersand thus determines its overall success.
Duets commitment to excellence ensures that they approach each task in hand withprofessionalism and dedication.
DUET GROUPValues and Principles
DUET GROUP
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38
Duet Asset ManagementDuet Asset ManagementDuet Asset ManagementDuet Asset Management Duet Private Equity & Real EstateDuet Private Equity & Real EstateDuet Private Equity & Real EstateDuet Private Equity & Real Estate Duet Financial ProductsDuet Financial ProductsDuet Financial ProductsDuet Financial Products
Brazil: ITACARE Real Estate FundBrazil: ITACARE Real Estate FundBrazil: ITACARE Real Estate FundBrazil: ITACARE Real Estate Fund
India: SARE South Asia Real EstateIndia: SARE South Asia Real EstateIndia: SARE South Asia Real EstateIndia: SARE South Asia Real Estate
FundFundFundFund
India: Duet India Hotels FundIndia: Duet India Hotels FundIndia: Duet India Hotels FundIndia: Duet India Hotels Fund
Turkey: Duet Golden Horn Real EstateTurkey: Duet Golden Horn Real EstateTurkey: Duet Golden Horn Real EstateTurkey: Duet Golden Horn Real Estate
FundFundFundFund
BR.I.T PlatformBR.I.T PlatformBR.I.T PlatformBR.I.T Platform
Duet Real EstateDuet Real EstateDuet Real EstateDuet Real Estate
Duet Private EquityDuet Private EquityDuet Private EquityDuet Private Equity
Hedge FundsHedge FundsHedge FundsHedge Funds
Duet Multi StrategyDuet Multi StrategyDuet Multi StrategyDuet Multi Strategy
Duet Global OpportunitiesDuet Global OpportunitiesDuet Global OpportunitiesDuet Global Opportunities
Duet ConvertiblesDuet ConvertiblesDuet ConvertiblesDuet Convertibles
Duet Special SituationsDuet Special SituationsDuet Special SituationsDuet Special Situations
Astor Duet Managed FuturesAstor Duet Managed FuturesAstor Duet Managed FuturesAstor Duet Managed Futures
Duet Global MacroDuet Global MacroDuet Global MacroDuet Global Macro
Fund of FundsFund of FundsFund of FundsFund of Funds
GSAH OptimumGSAH OptimumGSAH OptimumGSAH Optimum
Long Only FundsLong Only FundsLong Only FundsLong Only Funds
Duet Victoire Africa Index FundDuet Victoire Africa Index FundDuet Victoire Africa Index FundDuet Victoire Africa Index Fund
Capital MarketsCapital MarketsCapital MarketsCapital Markets
SLCDO 1SLCDO 1SLCDO 1SLCDO 1
Structured ProductsStructured ProductsStructured ProductsStructured Products
DPEL 1DPEL 1DPEL 1DPEL 1
Corporate FinanceCorporate FinanceCorporate FinanceCorporate Finance
Placement AgentPlacement AgentPlacement AgentPlacement AgentDuet Luxury Hotel Fund IDuet Luxury Hotel Fund IDuet Luxury Hotel Fund IDuet Luxury Hotel Fund I
DUET GROUPGroup Structure
DUET GROUP
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Alain SchiblAlain SchiblAlain SchiblAlain SchiblFounding Partner & Co-Chairman
Henry GabayHenry GabayHenry GabayHenry GabayFounding Partner & Co-Chairman
Osman SemerciOsman SemerciOsman SemerciOsman SemerciManaging Partner & CEO
Private EquityTrading
CFO
Risk Management
Compliance
Operations
Real EstateHedge Funds
New Business Development
Financial Products
Marketing
Investor Relations
Operating Model
Technology
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DUET GROUP
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Duet Asset Management is authorised and regulated by the FSA and is registered as anInvestment Advisor with the SEC.
Duets mission is to become the leading provider of absolute return investment strategies tosophisticated investors. Each strategy aims to deliver risk-adjusted absolute returnsuncorrelated to broad market indices.
Duet integrates its Investment Managers through a common infrastructure and economicalignment based on shared equity ownership. The alignment of incentives is critical toachieving sustainability, team collaboration, developing and retaining quality people and
building a long-term franchise value.
Duet Asset Management Ltd is the Investment Manager of:
Hedge FundsHedge FundsHedge FundsHedge Funds
Duet Multi Strategy
Duet Global Opportunities
Duet Convertibles Duet Special Situations
Astor Duet Managed Futures
Duet Global Macro
Fund of FundsFund of FundsFund of FundsFund of Funds
GSAH OptimumGSAH OptimumGSAH OptimumGSAH Optimum
Long Only FundsLong Only FundsLong Only FundsLong Only Funds
Duet Victoire Africa Index FundDuet Victoire Africa Index FundDuet Victoire Africa Index FundDuet Victoire Africa Index Fund
Funds
Duet Victoire Africa Index Fund
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Duet Victoire Africa Index Fund
The fund seeks to replicate the performance of a proprietary benchmark index that measures theinvestment returns of large capitalisation stocks listed on stock exchanges in sub-Saharan Africaexcluding the Johannesburg Stock Exchange.
The benchmark index is the Sub-Saharan Africa Large Companies Index. This is a customisedmarket-cap weighted index developed by Dr Ayo Salami and his research team.
Sub-Saharan Africa Large Companies Index US$ Returns
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Africa The Indexing Approach
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Significant challenges are faced for investors seeking alpha. Active managers in Africa arecompelled to use a bottom-up approach to stock selection with liquidity and market size as two of
the key screening criteria. By the time a stock will meet the minimum liquidity constraints that mostactive fund managers are using, the stock is not likely to be under-valued.
Higher transaction costs in emerging markets combined with high turnover can represent asignificant performance hurdle for active managers in emerging markets.
Index funds deliver a highly transparent investment processes, that consistently comply with fund
guidelines and regulations. Index funds provide investors with low cost access to the performance of different financial
markets.
For the large relatively liquid stocks in Africa, a passive investment strategy will prove to beeffective. Even in Africa it is difficult to consistently beat the market. In the search for alpha, youare more likely to find beta and sigma.
Africa The Indexing Approach
Index Membership Rules
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Index Membership Rules
The primary factors that determine index membership are liquidity and market value.
To be eligible for inclusion in the index, each individual security must achieve a traded turnover of atleast 0.1% of its market capitalisation in the quarter preceding the index review date and in at least 2 ofthe 4 quarters prior to the quarterly index review date.
At each quarterly review date all securities that satisfy the liquidity constraint and have a market valueabove $250 million are selected. Inclusion and deletion of index constituents is managed according tothe following buffer rules:-
An index constituent is not deleted from the index until its market capitalisation has been below$250 million for at least 2 consecutive quarters.
A non constituent is not added to the index until its market capitalisation has been above $250
million for at least two consecutive quarters.
Constituent companies in the index are reviewed on the last day of March, June, September andDecember and the rules governing index membership is implemented by a computer algorithm.
The index is capped and no single constituent has a weighting of more than 10%.
The aggregate weighting for all securities from a single country is capped at 40%.
Historic Simulation
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The historic performance of the Index was simulated back to 31 March 1999 to create a time series of dailyreturns for the index, with quality revision of the securities in the index. The index has generated positive returnsin 27 out of the last 35 quarters.
Benchmark Index Price Returns
Historic Simulation
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2007 Return 64.7%
2006 Return 38.4%
2005 Return 10.2%
2004 Return 14.7%
2003 Return 43.2%
2002 Return 21.5%
Index since inception 599.2%
(31 March 1999 to 31 Jan 2008)
Historic Simulation
Summary Statistics Sub-Saharan Africa Large Companies Index
Annualised Standard Deviation 14.1%
(over last 5 years monthly returns)
Best Quarterly Return 23.3%
Worst Quarterly Return -16.7%
Best Monthly Return 12.4%
Worst Monthly Return -10.2%
Percentage of positive months 73.3%
In last 5 years
Lets start running
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g
Every morning in Africa, a Gazelle wakes up. It knows itmust run faster than the fastest lion or it will be killed. Every
morning a Lion wakes up. It knows it must outrun the slowest
Gazelle or it will starve to death. It doesn't matter whether you
are a Lion or a Gazelle... when the sun comes up, you'd better
be running.
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Sustaining growth in Africa
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g g
No magic bullet, however growth has to be private sector-led
Improving property protection rightsEnhancing the international networks of African companies
Closing the infrastructure gap particularly transportation and housing
Creating vibrant financial markets regional cooperation
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