Lombard Asset Management is a bespoke asset management firm, formed in 2014, wholly owned by Constant Capital (Seychelles) a licensed securities brokerage company in Seychelles. It is managed by its partners who are responsible for the
day-to-day management of the firm. This independent structure means that we are able to focus 100% on our clients rather than other stake holder. And our size and focus means that we can respond with agility to market events. At Lombard Asset
Management we never stop searching for better ways to manage our clients’ assets.
The portfolio of funds is managed by a highly experienced professional investment team. All of the team members have over twenty years’ experience each in managing investment funds. The fund targets the fast growing sub-Saharan African markets. Sub-Sahara is seen as the major growth region globally over the coming half century. The investment team is one of the few teams that has focused on this region over the past decade and has consistently delivered high returns. This fund cannot be accessed by the general public. Currently we are offering investment opportunities in only the Africa Frontier Fund. In the future we will give clients access to the other funds under our management.
Lombard Asset Management and Constant Capital are regulated by the Financial Services Authority of Seychelles since 2014.
Interview with Derek Seely — Fund Manager
In one of your presentations, you referred to the new era of asset management. What do you think defines this era from the past?
In the 1990’s, investments were characterised by a period of irrational exuberance, where equities continually rose. Today countries are trying to rid themselves of the debt they accumulated. The big question is how are they going to deal with that debt? There are three options. The world grows; inflation transfers value from the saver to the borrower or there is a major default. There are many challenges to growth - some parts of the developed world are aging and lack innovation. Africa is one of those regions that offers pockets of excellence and real opportunities at current valuations.
Is the asset management business changing in response to this new era?
Yes. The bigger asset managers are facing complex challenges around the scale of their business models. It has become difficult to manage diverse types of business and investments under the same umbrella mandate with ever rising costs that need to be passed back to the investor. Smaller asset managers that are able to focus on streamlining their business, thereby keeping costs low and being able to offer a focused approach that understands their investor’s needs. This model will defiantly outperform over the next decade.
We have heard a lot about wealth shifting into emerging markets; growth is exponentially faster than in developed markets. What impact do you think asset managers in these countries will have on the global market?
At the moment, there are not many “home” sourced asset managers in the emerging markets. Anyone who invests will tell you that, you need to be part of the environment to understand the complex linkages that drive profits in these market. This “on the ground” and “get my hands dirty” philosophy enables us to identify where the market’s future comparative advantage will come from. This creates a real advantage for us.
There are many who still consider Africa “the dark continent”. Why do you rebuff these ideas?
The situation in Africa began to quietly change about 15 years ago. Real macroeconomic reforms have been able to reduce inflation and have opened these economies to international trade. The regulatory environment has also improved while public ratings, such as the World Bank’s “doing business” surveys, have enabled African governments to benchmark their performance and enhance growth beyond resource extraction. These factors have led to an exponential increase in profitability for companies. Due to the historical isolation of Africa, another benefit has also emerged. Africa lacks co-integration with the rest of the world’s economies – thereby adding to returns while reducing the overall portfolio risk for an investor. Finally, as China’s per capita GDP grows, the benefits of the low wage factory of the world are being eroded – Africa will soon be the last low-wage region for labour intensive manufacturing. We have already seen the start of this process with the OECD countries diverting manufacturing from Asia to Africa.
Lombard has the key benefit of being based in a country that is geographically and regulatory positioned that it can take advantage of opportunities that are not available to the more traditional funds that are based in Europe and Asia.
The Seychelles has no restriction on capital flow. Lombard can buy and sell assets without restriction. The banking system is safe, with international banks, such as Barclays Bank, having operations there.
The laws protecting investors are strong, and it was recently recognised in an Australian survey as one of the best regulated offshore destinations for corporate governance. The Seychelles is the primary offshore investment jurisdictions in Africa. Its position makes it ideal for managing not only its Lombard Africa Fund, a premier fund that in invests in African equities, but global investments as well.
This, in combination, with its team of seasoned investment professional, that have worked for major investment companies globally, ensures that its investment clients receive above average returns without any additional risk.