Mark Mobius has defied the sell-off in emerging markets and raised £100 million for his new Mobius Investment Trust (MMIT), lifting hopes that the current rush of investment companies coming to market may do better than expected.
Although the sums subscribed were half what the veteran fund manager had been targeting, the initial public offer (IPO) took place against a difficult backdrop as emerging markets officially entered a bear market with a fall of over 20% since February.
The emerging market trust had targeted more than £200 million when it detailed its flotation plans earlier this month.
But Mobius Capital Partners had unofficially acknowledged the 'uphill struggle' in gathering support as emerging markets struggled against a strong dollar and fears of the escalating US-China trade war.
Announcing the results Mobius said the £100 million had come from institutional and private investors and represented 'a solid endorsement of our strategy, given the challenging sentiment towards emerging and frontier markets'.
'We now look forward to capitalising on the significant investment opportunity that exists in our target markets,' he added.
Mobius, 82, had to overcome some investor scepticism about his return to fund management after his departure from Franklin Templeton earlier this year after more than three decades with the group, said Jason Hollands of Tilney Investment Services.
Time would tell whether backing Mobius was shrewd he said, but added: 'The Mobius team are starting with a clean sheet of paper and a wad of cash to deploy in a market of depressed stock prices - that’s not such a bad place to be in.'
Mobius originally launched the Templeton Emerging Markets (TEM) investment trust in 1989, only stepping back from the £2.2 billion fund in 2015 when Carlos Hardenberg became its lead manager.
Hardenberg followed Mobius out of Franklin Templeton to his new firm, alongside Greg Konieczny, his two co-partners.
Kunal Desai, former Citywire-rated manager of the Neptune India fund, and Fergus Argyle, formerly at emerging markets boutique Somerset Capital, have also joined the new firm.
MMIT shares will start trading on the London Stock Exchange on 1 October. The IPO was managed by corporate broker Jefferies with Scott Harris advising on the intermediaries offer.