Under a mandate from the Government of Mauritius, Crown Agents Investment Management played a leading role in setting up Mauritius Fund Management Limited in 1993. At that time this new closed end fund with an initial capital of USD17million offered the first opportunity for international portfolio investors to buy Mauritian securities. Throughout its 7 year term the fund played a pivotal role in the Mauritian government's strategy of opening the securities and capital markets to foreign investors.
Critical to the success of the launch was the international reputation and level of external interest in Mauritius, and the availability of a sufficient number of well run local companies in which to invest. More specific factors which helped to generate investor interest included:-
- an effective, recognised stock exchange;
- a "tradeable" local currency;
- sound standards of governance: trustworthy institutions and individuals with professional standards;
- willing and effective government authorities and
- the effective rule of law and ability to uphold contractual and property rights.
Key players in the launch of Mauritius Fund Management Limited included Mauritius Commercial Bank and the Ministry of Finance.As a development partner, Crown Agents was able to introduce external partners and our status and experience of working with governments helped to build their confidence. Institutions from outside Mauritius included Genesis Emerging Markets, a fund manager specialising in emerging market equity, the IFC who provided seed money for the fund, SG Warburg (the lead manager for the fund) and the reputable individuals who became directors of the fund.
At that time there was little experience of establishing such a business and the commercial expectations were difficult to quantify. The central belief was that a successful fund could be launched which would:-
- enhance the financial and business prospects of Mauritius as a whole;
- earn fee income providing a dividend stream for the partners, and
- generate acceptable returns for investors.
.Within a few years the business had become a successful and valuable asset and today Mauritius is recognised as an important offshore financial centre with a sound reputation.
When the fund's term ended in 2000, Crown Agents, together with Mauritius Commercial Bank and Genesis, founded a new local investment management company, MCB Investment Management (www.mcbim.com) providing professional investment management services to local institutions such as pension funds and insurance companies. At 31st March 2010 MCBIM was managing USD290m for a diverse portfolio of clients. Crown Agents Investment Management remains a shareholder and continues to support MCBIM, managing foreign fixed income investments, sharing market information and analytical skills