Boutique fund house Charlemagne Capital has soft closed its popular Magna New Frontiers fund to new investors as assets head towards its $500m (£368m) limit.
Charlemagne has scaled back marketing of the portfolio in light of assets passing the $400m mark and has implemented a “soft close ceiling” for new investors. This means the firm will only accept investments from new clients if the fund sees redemptions.
The fund, managed by Stefan Bottcher and Dominic Bokor-Ingram, predominantly invests in frontier market equities. It has grown in popularity among fund buyers after outshining peers since its launch in 2011. The product has returned 59 per cent in the past three years versus 16 per cent for the MSCI Frontier Markets index.
Now $418m in size, it is currently the largest strategy in Charlemagne’s five-strong suite of emerging and frontier market specialist equity strategies.
The firm’s head of European distribution, Varda Lotan, said investors had been made aware of the fund’s capacity constraints, adding that assets above the $500m level would compromise the managers’ strategy. She said Charlemagne would levy a 5 per cent initial charge once the fund reached the upper limit.
Ms Lotan said: “We review capacity on an annual basis as the capacity is based on the underlying markets and stocks that we invest in. Because we are investing in very dynamically changing countries and stock markets we often see big changes in liquidity year to year in the local stockmarkets.”
