The FMG Iraq Fund has grown by + 25% since it began in May 2010. Year to Date the fund is up + 10% and in the month of June it was up by an estimated + 4.1%.
The Fund invests mainly in stocks listed on the Iraq Stock Exchange (ISX) and to a lesser degree in off shore listed shares that derive a significant part of their business from Iraq.
Johan Kahm, founder of FMG, who visited Iraq in June 2011 and said upon his return:
“Iraq is turning the corner for the better. We are looking at a unique investment opportunity where we hope to make outsized returns over the next 5-10 years. Our decision to launch the Iraq Fund a year ago seems to have been well timed. Iraq sits as the third largest proven oil reserves in the world and has the potential to overtake Saudi Arabia as the world’s largest oil producer.”
Henrik Kahm, who is managing the Iraq Fund, said:
“Over the last year there has been a strong performance of the Iraq Fund thanks to the successful efforts to stabilise and rebuilt Iraq. The Fund offers investors an easy way to participate in the Iraqi growth story and is positioned to take advantage of the growth derived from post-war reconstruction and massive oil production expansion.”
The following facts are supporting the investment opportunities in the Iraq:
- Iraq is currently producing 2.7 million barrels of oil per day planning for 12 million by 2015.
- A country with 143 billion barrels of Proven Reserves - only 20% of Iraq has been explored for oil.
- Iraq has $46bn in Cash Reserves and growing.
- The Economy is expected to double (from $75bn to $150bn) by 2015. The new democracy is standing up well to its reconstruction challenges. $186 billion infrastructure spending plan. Should the price of oil be over $100 per barrel, then the infrastructure spending can be expected to increase significantly.
- Expected GDP growth of some 7% in 2011 (IMF).
- The current market cap of the Iraq Stock Exchange (ISX) is less than USD 4bn, compared to its neighbour Saudi Arabia, that has a market cap 85 times larger despite only 1.9 times more oil reserves.
- In 1995 FMG launched one of the very first Russia Funds and the early investors have now made 2000% returns. Today a similar opportunity has unfolded. Iraq is emerging as a very exciting frontier market.
Although usually only open to larger institutional type investors, FMG provides investors with the opportunity to invest with a minimum investment of US $10,000. (£6,000)
Investment into the Iraq Fund is an attractive proposition for UK investors, as gains will be taxed as capital gains at 28% and not as income tax rate at 50% as the fund has Her Majesties Revenue and Customs “Reporting Status”.
Previously called the FMG Special Opportunity Fund it has now been renamed due to the nature of the investments as the FMG Iraq Fund.