Today I opened a small position in a stock I’ve been sniffing around for many months — and in actuality, though it trades like a stock it’s really more of a closed-end fund. It’s called the Africa Opportunity Fund (AOF in London on the AIM, AROFF on the pink sheets, it trades in US$ terms in both places), and it is EXTREMELY illiquid — it trades only $20-30,000 worth of shares a day even in London, and quite a bit lower volume here on the pink sheets.

This is an investment fund set up to get exposure to growing markets in Africa, so I’m effectively using some of my proceeds from selling Lonrho to get some African exposure with folks who appear to me to be good managers and who can provide a rare access to a pretty diversified portfolio of smaller stocks and markets on the continent, particularly those stocks that would be almost impossible for me to easily trade on their home exchanges. The holdings reflect a lot of exposure to South Africa, which is no surprise given the size and maturity of that market, but unlike most Africa funds they have a substantial exposure to the countries in between South Africa and the large Mediterranean markets (Egypt et al), including Kenya, Nigeria, Tanzania, etc. There’s obviously risk, of course, since these are frontier markets that often have very volatile economies, unstable governments, and sometimes unpredictable spurts of inflation, and I haven’t studied all of their holdings, but I like their approach and I’m opening a position here at a discount to net asset value (they post their NAV monthly, as of May 31 it was $1.12, so I bought at roughly a 10% discount to NAV. The discount has sometimes been far greater in the past).

This is NOT NOT NOT a recommendation, but I’ve promised to share my personal portfolio with you and this is now about a 1% position for me. I’ll be watching it to see if I want to increase that exposure, and may cover it in more detail in the future if I have anything interesting to share. Their website is here in case you’re curious, and if you’ve heard of them it might be because Chris Mayer has covered them from time to time in the past (including a piece from Capital & Crisis a couple years ago that’s ...