Boutique Saudi fund manager launches debut fund

11 May 2011

Mayar Capital Management has launched its new business with a debut fund offering worth $3m. The Shariah-compliant Mayar Fund will follow ‘value investing’ principles, selecting out-of-favour assets which are trading significantly below the company’s estimate of their true value, according to its founder, Abdulaziz Alnaim.

The fund is targeting a total AUM of $10-15m over the next 12-18 months, and launches next week with $3m seed capital, including $2m which was transferred from Alnaim’s previous fund, and $1m which was raised last week. It will target only high-net-worth-individuals with long-term investment horizons, in a continuation of the policy followed by Alnaim’s previous fund, Yareem Limited.

The fund will take 10-20 positions with around 50-60% of its portfolio invested in the top five picks. It will seek out ethical investments which are politically, environmentally and socially sustainable. “We will try to take positions in selected opportunities which are out of favour,” Alnaim told Mena FM. “We have a bias to US markets, but we will invest globally depending on where the opportunities are.”

The Mayar Fund aims to beat its benchmark, the MSCI World Index, by around 2-3% per annum, after expenses and fees. In the long term, the fund expects to generate net returns of approximately 12% per annum, doubling its money every six years.

“We are a boutique investment house and at the moment we intend to focus our energy on this one fund,” he adds. “The ultimate goal for Mayar Capital is to be an asset manager with a very clear value-investing bias, which is something that we don’t currently see in the region.

“In the decades to come, I see us launching other types of fund. I don’t know what those funds are going to be, but I do know that every one of them is going to have to share the underlying value-investing principles and we’ll make sure that everyone we invest in adds to it.”

Apex Fund Services is acting as the fund’s administrator, with Jeffries International as prime broker and Conyers Dill & Pearman providing legal support. Mayar Capital follows a Cayman structure and is audited by KPMG on the Cayman Islands.