Investors in emerging markets funds speculating on Africa's potential- Barrons-July 31,2010

Africa suffers from misconceptions more than any other area in the world," argues Miles Morland, whom many consider the father of fund investment in Africa. He founded Blakeney Management in the early 1990s, and now is chairman of Development Partners International, a London-based private-equity firm that invests in Africa.

Perceptions based on the way Africa once was linger in the minds of many investors, he says. The U.S. and U.K. effectively have nationalized more companies during the financial crisis (think GM, Chrysler, AIG, Citigroup, Royal Bank of Scotland, Northern Rock) than African nations have in the past nine years, he quips, and national debts are far less worrisome there than in America or Europe.

"Funnily enough," Morland continues, "people wearied by bankruptcies, meltdowns, restructuring and bank bailouts are amazed to learn about a continent that has transformed itself into one of the fastest- growing regions in the world, where banks haven't needed bailing out, no large companies have folded, with no accounting scandals and where the biggest problem businessmen have is getting capital to finance growth."

He is seconded by another investor with decades of experience, Donald Elefson, portfolio manager of the Harding Loevner Frontier Emerging Markets Fund (ticker: HLFMX). Among frontier regions, Africa is the most interesting, he asserts, because it offers strong markets with huge potential, liberalizing policies, good capital flows and undiscovered high-quality companies. And Nigeria is one of his favorite frontier countries. He contends that the giant nation of about 150 million people eventually can fill the same leading role for Africa that Brazil has played for emerging markets.