Reflections of a Fund Manager in Tz

In this episode recorded on 10.08.2023, we are joined by Tim Staermose - Founder, African Lions Fund as we explore investing in equities in Tanzania. We discuss the structure of the Tanzanian market, finding investors, moving funds across jurisdictions, and the Africa Lions Fund’s performance.Below are some nuggets from the podcast:“The beauty of funds management is that it is very scalable. Those fixed costs don't rise commensurately with the assets under management, they might rise a little bit, but certainly not at the same pace. You might be able to grow your fund 10 or 20-fold before your fixed costs double in many cases.”“I'm a value investor but what I'm looking for primarily is, good, solid businesses run by honest and competent people. That's number one. And then I'm trying to buy them also at valuations low enough that I think that there's a potential for the valuations to double. So those are the things that attract me, high returns on equity, and competent and honest management.”“In terms of which markets to be bullish on and which to avoid, there's two factors at work there. There's the fundamentals, and then there's also the valuation. So at what point in the cycle is the economy and the credit cycle and so on? That's important. I like to go to places that are not near the top of the cycle. Where there are some problems, the economy is either bottoming out or turning. But then also the valuations. It's no use going in somewhere where valuations are still very high. So you need both things working together.”Subscribe to get notified when we make a new post.Show Notes00:00:00 Introduction00:03:23 Investing In Tanzania and Investment Philosophy00:13:49 Setting Up A Fund In Tax-Neutral Jurisdictions00:18:24 Structure and Risks in the Tanzanian Market 00:31:08 Investment Criteria00:35:02 AUM and Costs of Running Sustainable Equity Fund00:42:41 Activism vs Exiting a Position00:49:02 Succession Planning, Lock-in Periods, and Allocation 00:53:08 Searching for Data In Africa00:56:20 Dividend Payments and the Depreciating Shilling01:04:20 Moving Funds Across Jurisdictions01:07:25 Macro Perspectives and Undervalued Stocks in the NSE01:10:48 Tanzanian Banks01:16:55 Africa Lions Fund’s Performance01:19:01 Closing Thoughts And Reflections Get full access to The Mwango Weekly at mwangocapital.substack.com/subscribe