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From Kirsten Bischoff, Opalesque New York:

Opalesque has learned that New York and Washington-based Caravel Management’s The Caravel Fund (International) Ltd, ended 2010 with returns of +37.8% bringing the fund’s annualized returns since inception in October 2004 to +22.2% (the fund had one down year in 2008 with -50.5%). The fund has outpaced the MSCI emerging markets indices since its launch by +64%. It enters 2011 with $200m in assets under management.

With a concentrated portfolio of public emerging market equities (with a focus on non-BRIC markets and the frontier countries) the team has lately focused on Saudi Arabia, Vietnam and Pakistan, although its largest holdings by region (as of year end 2010) are in the Philippines, Turkey and Egypt.

In a year-end communication with investors, the team at Caravel said that it anticipates the growth of the working age population to significantly contribute to the economic success of Indonesia, Pakistan and Vietnam. The firm also looks for “transition” periods in frontier countries, and cites the Philippines, Nigeria and Rwanda as places introducing reforms that will attract capital and eventually cause “re-rating of their markets.”

Another performance contributor that Caravel expects to see drive future performance is currency appreciation, as developing nations shift away from their previous soft peg to the US dollar.

Directional strateg......................

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