March 21, 2014

Top Lipper Award for Emerging Markets Goes to Africa-focused Fund

Nile Pan Africa Fund Receives 2014 Lipper Award
Nile Capital Management's Andy Chen and Larry Seruma

Nile Pan Africa Fund Recognized by Lipper as
Top Performing Fund

Princeton, New Jersey, March 21, 2014 – Nile Funds is pleased to announce that the Nile Pan Africa Fund (NAFIX) has received the 2014 Lipper Award for best Emerging Market Fund for the three year performance period ending December 31, 2013 out of 335 Emerging Market funds.  The Lipper awards recognizes mutual funds that have excelled in delivering consistently strong risk-adjusted performance, relative to peers.
This award recognizes our investment process and approach to identifying growth businesses trading at value prices in Africa and frontier markets.   We are very pleased with the win – especially as it highlights the Africa investment case – for investors who might not yet have heard of our “pure play Africa investment opportunity”.
“Africa represents about 4% of global GDP today and is projected to exceed 12% by 2050, according to economists at Citigroup.  We believe an Africa allocation should be a core holding in every global portfolio,” said Larry Seruma, Portfolio Manager.
The fund is open to investors and is available for purchase at Charles Schwab, TD Ameritrade, and other major brokerages.  The minimum initial investment is $1,000 for Class A (NAFAX) and $250,000 for Institutional Class shares (NAFIX).
 About Nile Capital Management.
Nile Capital Management is a Princeton-based asset management firm with in-depth expertise in frontier markets. Since 2010, Nile has served as investment adviser to Nile Pan Africa Fund, a pioneering fund focused on capturing Africa's economic growth and the Nile Global Frontier Fund, an actively managed fund investing in the global frontier.   Nile seeks to identify and capitalize on attractive investment opportunities in Africa and other frontier markets. Additional information is available at

Past performance and ratings are no guarantee of future results. Rankings and ratings are only one form of performance measurement. For current performance information please visit

Investors should carefully consider the investment objectives, risks, charges and expenses of the Nile Funds. This and other important information about the Funds is contained in the prospectus, which can be obtained by calling 1-877-682-3742. The prospectus should be read carefully before investing. The Nile Funds are distributed by Northern Lights Distributors, LLC. Nile Capital Management, LLC is not affiliated with Northern Lights Distributors, LLC.

Mutual Funds involve risk, including possible loss of principal. Frontier market countries generally have smaller economies and even less developed capital markets than traditional developing markets, and, as a result, the risks of investing in developing market countries are magnified in frontier market countries.

Lipper Fund Awards are based on Lipper’s Consistent Return calculation.  Lipper scores for Consistent Return reflect funds’ historical risk-adjusted returns relative to funds in the same Lipper classification and include each fund’s expenses and reinvested distributions, but exclude sales charges.  Consistent Return values are calculated with all eligible share classes for each eligible classification.  The highest Lipper Leader for each Consistent Return value within each eligible classification determines the fund classification winner over three, five or 10 years.

Lipper Award winners are recognized for being the top-risk adjusted performing funds in their respective Lipper peer groups for the listed periods ending December 31, 2013.  Past performance or ranking is not indicative of future results.  Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at Lipper Leader Copyright 2014.


Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

March 12, 2014


Opportunities In Zimbabwe | Frontier Market Investing

Savita Iyer-Ahrestani writing for ThinkAdvisor asks a question on the minds of many investors around the globe, "Is Robert Mugabe's health failing?" Many are waiting to see what will happen in the inevitable post-Mugabe Zimbabwe.

"Larry Seruma, chief investment officer and managing principal at Nile Capital Management, said Zimbabwe’s highly educated population—it has an adult literacy rate of 90%, one of the highest in Africa—is one of the country’s greatest strengths and a building block for the future.
“There is a silver lining in that whoever succeeds Mugabe will see the need to have a different environment and a need to change the growth profile of country,” he said. However, the current policies are counter-productive for Zimbabwe and frustrating for foreign investors, and they are affecting a number of Zimbabwe’s key industries, Seruma said, notably agriculture.
Several years of repossessed farms and land grabs have resulted in experienced Zimbabwean farmers leaving the country and taking their expertise elsewhere. Rampant corruption and weak institutions have exacerbated the situation, and while other African nations are now benefiting from Zimbabwe’s agricultural expertise, the country itself has gone from being a food exporter to a food importer and is facing a massive food security issue that’s a drain on an already stretched economy, Seruma said."
Follow the link to read the complete article, "Investors Can Find Opportunities in Zimbabwe Despite 'Mugabe Rules'
Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

March 10, 2014

"Nigeria's soaring economy has met its match: old-style politics"

Nigeria Politics | Africa Investing
Former Nigerian central bank governor Sanusi with MasterCared CEO Ajay Banga
"On February 20, President Goodluck Jonathan suspended central bank governor Lamido Sanusi amid the latter's claims that $20 billion in revenue was missing from the state oil corporation. The move sparked widening bond spreads and tumbling currency valuation in Africa's most populous state."

Jake Bright, Whitehead Fellow of the Foreign Policy Association, covered the complexity and complications of this event for Quartz, an Atlantic Media digital outlet. In Bright's article, Nile Capital Managements Larry Seruma is quoted as having said, "The market did not take his (Sansui's) suspension very well of for a number of reasons. Sanusi has been a good governor. He's been an inflation hawk. Current inflation is about 8%, the benchmark bank rate is about 12%, so you are getting a real rate of return of about 4% -- pretty unusual in frontier markets."

Bright wrote: "Foreign investor jitters immediately after the suspension led to a sell-off in Nigerian assets, a 3.2% one day drop in the naira, and an 11-basis point yield spike on Nigeria's 10-year eurobonds. Not all the blame rests with the Sanusi shake-up, though. Nigeria has been contending with the same economic flu affecting many emerging markets that have been dependent on US Federal Reserve policy and reacting to its taper

Nile's Seruma added, " As the Fed tapers, the interest differential between the high-yielding assets in Nigeria and developed market asset has shrunk. Because of that you are seeing more investors pull out of Nigerian equities and fixed income."

Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820

March 7, 2014

from The Africa Report: Africa in 2064 -- an Afrocentric future

Illustration by Emeric Therund
Africa in 50 Years? | Africa Investing

"With an African tech boom amidst continental unity and a meltdown in Europe, Stephan Chan, Professor of International Relations, School of Oriental and African Studies, London, imagines that Africa could be like in 50 years."

"It is 2064 and the sun shines over the Mediterranean. African Union drones fly in the blue skies and automatically drop life buoys onto the waters below, where Greek workers, fleeing a country of unemployment and financial meltdown – the fifth Greek default on its loans since 2012, with no further bailout in sight – struggle to stay afloat after their boat sank into the lifeless sea."

"The European part of the West is finished.  The United States has returned to splendid isolation, and Africa is the new great star of global capital and international relations..."

For more of Professor Chan's vision click through this link to read "Africa in 2064 - an Afrocentric future."

Nile Capital Management
We Know Africa: From Cairo to Cape Town

For more information please call 646-367-2820

March 5, 2014

For Investors Heading For The Frontier: Active Management Adds

Nile Capital presents pan Africa mutual fund
The once-vaunted BRICs have lost their mojo, at least temporarily, as the place to look for stock market diversification. Since April 2011, emerging market equities have generated negative returns.
Surprisingly, part of this void has been filled by the strong performance of frontier markets. In 2013, the gap between performance of the MSCI Frontier Markets Index (25.90 percent) and the MSCI Emerging Markets Index (-2.60 percent) was the widest since 2005.

For institutional and individual investors alike, frontier markets are becoming a viable asset class to include in a well-diversified portfolio, and high rates of economic growth are the main attraction. Of the 30 fastest growing economies in the world (measured by real GDP growth), 23 are frontier markets.

The easiest way to implement a frontier market allocation is to participate in an index fund. Just as investors flocked into emerging markets a decade ago through passively managed vehicles such as iShares MSCI Emerging Marketing Fund, they now are showing interest in frontier index funds such as iShares MSCI Frontier 100 Fund (FM). With a goal of tracking the MSCI Frontier Markets Index, FM has grown rapidly in recent months, surpassing $500 million in assets.

Buyer beware.

Three Advantages Of Active Management
Is an index fund the best choice for participating in frontier market growth?

We believe the dynamics of frontier markets favor active management over indexing. Nile Capital Management, one of the few firms to actively manage frontier market funds, has demonstrated three key advantages an active manager can identify and exploit in frontier markets.

1. Portfolio Stability – Nile seeks to identify well-managed companies operating on the African continent, and then hold their stocks over extended periods. In comparison, index funds can be relatively unstable. Currently, the top three country weights in FM are Kuwait (18 percent), UAE (17 percent) and Qatar (16 percent). However, in May the MSCI index methodology will reclassify UAE and Qatar from the frontier to the emerging category. Millions of dollars invested in FM will then be reshuffled among other frontier markets, for reasons unrelated to frontier market growth or company profitability. Since frontier markets are dynamic, index re-classifications occur frequently and can be unsettling to investors.

2. Diversification – About 54 percent of the weight of the MSCI Frontier Markets Index is in the financials sector. This does not represent the diverse economic activities that are driving frontier market economies, especially the three themes that we seek to include: natural resources; infrastructure growth and a rising consumer sector. Across the African continent, we see countries with uncorrelated economic cycles, and we are identifying attractive companies operating under diverse business models.

3. Population and demographics – The high economic growth of frontier market economies is directly related to population and demographic trends. Africa’s population, currently estimated at one billion people, is projected to double by 2040. The average age of the continent’s people is 21, compared to 45 for developed countries. The average GDP per capita in Sub-Saharan Africa is $1,400 compared to $30,000 for the Arab States of the Gulf Corporation Council. (GDP per capita in the US is $51,000).
Of course, it’s the younger generation that forms new households, creates families, and drives consumer sector growth. An active manager can emphasize countries with emerging consumer economies such as Nigeria and Uganda. In comparison, a frontier index fund may be heavily weighted toward more mature economies such as Kuwait, the United Arab Emirates, Qatar and even Saudi Arabia (in some classifications).

In summary, we believe the smartest way to invest in the frontier is to take a long-term perspective and focus on well-managed companies trading at attractive valuations. Our portfolio concentrates on about 30-40 companies, and we look for opportunities to identify businesses trading below intrinsic value. We are very comfortable with the valuations of our leading companies, some of which are not covered by any Wall Street analysts. Indeed, the frontier markets are much less “efficient” than developed or emerging markets.
We believe frontier market knowledge and in-depth research gives active managers an edge in these markets, relative to a passive indexed approach.
Nile Capital Management
We Know Africa: From Cairo to Cape Town
For more information please call 646-367-2820