Charlemagne teams up with Tehran group to offer Iran fund

Investors are starting to flood into Iran as the historic nuclear agreement between the west and Tehran, announced last week, is already beginning to bear fruit.

On Tuesday, UK asset manager Charlemagne Capital and Turquoise Partners, a Tehran based investment group, announced plans to offer international investors exposure to Iranian equities in a deal that is likely to be one of many more over the coming weeks and months.

Dominic Bokor-Ingram, a portfolio adviser at Charlemagne, said: "I doubt you will be able to get a seat on a flight to Tehran in the next week or two as business people will be flocking to the Iranian capital. The nuclear deal will open the floodgates to international investment in Iran."

After an agreement that is being hailed as the most promising thaw with the US since the 1979 hostage crisis, Mr Bokor-Ingram insists that exposure to Iran is one of the best opportunities for investors because of its highly diversified economy and educated population of more than 80m people. Unlike other Middle Eastern countries, it is not overly reliant on oil and gas, he adds.

Charlemagne and Turquoise will launch their first fund in the next few weeks. It will be a general equity fund aimed at international investors, with $70m under management initially. The groups have plans to grow it to more than $200m in the short term.

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They also plan to set up funds in different sectors in areas such as oil and gas, banks and retail once the general fund has been established.

However, some other investors warned against over-optimism. One emerging market fund manager at a London listed group said: "I don't want to be a killjoy, but let's wait and see if a final deal is reached."

If a final nuclear deal due to be agreed by June 30 does go ahead, then Iran's equity markets should enjoy a significant boost as sanctions that have stifled trade and investment will be lifted.

Optimism that international trade sanctions on Iran will be lifted has already resulted in dozens of fund managers visiting the country and carrying out due diligence on Iranian companies in the past 12 months.

The Iranian stock market is overwhelmingly a domestic market, but Mr Bokor-Ingram said this will change swiftly as more and more international groups are expected to launch funds and joint ventures in the country.

"Iran is one of the more developed markets in the Middle East available to emerging market investors, which makes it very attractive," Mr Bokor-Ingram said.

Charlemagne is an AIM quoted emerging market asset management group based in London with about $2.5bn under management. Turquoise is a financial services group with more than 70 employees in Tehran.

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