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Matrix New Europe Fund increases exposure to Turkey, marks 4 year anniversary with 52.8% outperformance

Wednesday, January 05, 2011

David Thornton
Opalesque Industry Update - Matrix Group marks the four year anniversary of the Matrix New Europe Fund, managed by David Thornton, as the Fund increases its exposure to Turkey.

David Thornton, Manager of the Matrix New Europe Fund, comments on his recent increase in exposure to Turkey:

“I have recently been building exposure to Turkey, despite many commentators arguing it is time to take profits in this market. Turkey has a young, growing population – the best demographics in Europe. It is also blessed with geographical advantages, being at the crossroads of Europe, the Middle East and Russia. The weak coalition governments of the past have gone and political stability has delivered strong economic performance which will likely culminate in government debt returning to investment grade status this year.

“Turkey’s GDP will have grown by over 7% in 2010 with around 4.5% expected this year. The corporate sector enjoys good standards of governance and is well placed to exploit this constructive environment, yet the market trades on a modest p/e of 10. As investors start to look beyond the BRIC countries, Turkey has the scale and growth prospects to become a strategically important component of the global emerging market scene.”

On the Fund’s recent performance and historical focus on Russia, David Thornton continues:

“The core investment theme from the start has been to avoid the energy and resources sectors which dominate the regional indices. Tax policy and political interference in Russia mean that the extractive industries are managed in the State’s rather than the shareholders’ interests and investors can of course obtain oil and gas industry exposure in any number of markets around the world without taking the trouble to go to somewhere like Russia.

“What is hard to get elsewhere, however, are the superior growth opportunities generated by the domestic economy as wealth builds and a middle class emerges: this is why we much prefer consumption and infrastructure as themes and this focus has driven our performance. The recently announced acquisition of one of our holdings, Wimm-Bill-Dann Foods, by Pepsico adds weight to this thesis”.

Commenting on the performance, Angus Woolhouse, CEO of Asset Management at Matrix said:

“The performance of the Matrix New Europe Fund since launch has been outstanding, outperforming the regional MSCI Eastern Europe Index by 52.8% and returning 24.3% for 2010 to 30th November. Launched in December 2006 as an eastern European equity fund, the Fund originally invested throughout Central and Eastern Europe but has focused almost exclusively on Russia over the last two years only recently building up exposure to Turkey to reflect this country’s increasing strategic importance.”

(press release)

About Matrix Group

Matrix Group is a privately owned financial services business in the UK with around £4 billion of assets under management and around 250 professionals employed across three divisions: Asset Management, Investment Banking and Property. Since inception in 1987, Matrix has raised over £14 billion of assets for investments across these business areas.

Within the asset management division of Matrix Group, as well as funds of funds, cash funds and private equity, there are currently seven long/short equity funds:

  • Matrix New Europe Fund, focused principally on Russia
  • Matrix Asia Fund, one of the few long/short equity funds to have a pan-Asian investment remit, including Japan
  • Matrix Macro Fund, a global macro equity fund
  • Matrix PVE Global Credit Fund, focused on global credit markets
  • Matrix Redux Emerging Markets Fund, a macro fund focused on emerging markets
  • Matrix Asia UCITS Fund, a UCITS III fund
  • Matrix Lazard Opportunities Fund, a UCITS III fund investing in convertible arbitrage and special situations/event driven strategies

Corporate website: www.matrixgroup.co.uk

- FG

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