Iranian securities fund seeks foreign money post-sanctions
By Andrew Torchia
DUBAI (Reuters) - A British asset manager and a Tehran firm formally launched a fund on Sunday, the day after world powers lifted sanctions against Iran, to invest foreign money in Iranian securities, aiming to reach a size of $100 million this year.
"We see tremendous opportunities in Iran's equities market and this is the first European Union-regulated fund available to capture them," Ramin Rabii, chief executive of Iranian investment group Turquoise Partners, said by telephone.
He added that other firms were laying plans to create funds for foreigners in Iran as the lifting of sanctions opened up a stock market with a value of around $80 billion at the free market exchange rate - one of the last big unexploited opportunities for global portfolio investors.
Turquoise's Cyprus-domiciled fund is a venture with London-based Charlemagne Capital , a frontier market-focused firm with $1.9 billion under management as of last October.
The open-ended fund started operating last month and has reached about $55 million in size by combining newly raised money with an existing $50 million fund run by Turquoise, Rabii said.
Turquoise says it manages over 90 percent of the foreign portfolio investment on the Tehran Stock Exchange, which is estimated to total less than $100 million.
The new fund was marketed in Asia and the Middle East but has obtained most of its new money from rich individuals, family investment offices and frontier funds in Europe, Rabii said. It is not available to investors in the United States, which is keeping some of its sanctions against Iran in place.
Bucking a strong downtrend in global markets, the Tehran exchange's main stock index rose 0.9 percent on Sunday after a 2.1 percent gain on Saturday, but it is still 1.3 percent lower than it was 12 months ago.
Charlemagne and Turquoise say they expect the lifting of sanctions to enable Iran's economy to grow at annual rates of 6 to 8 percent for the foreseeable future - faster than many private analysts predict.
With the average Iranian stock trading at about 5-1/2 times this year's projected earnings, and an average dividend yield of 12 percent, the market is attractively valued by international standards, Rabii said.
As oil prices plunge, the fund has been steering clear of energy-related stocks and focusing on consumer plays such as pharmaceuticals, food and beverage firms and telecommunications, he said.
(Reporting by Andrew Torchia; Editing by Kevin Liffey)
