Why Michael Spencer, founder of inter-dealer broker ICAP, is funneling tens of millions of dollars into a spanking-new hedge fund that aims to profit from frontier markets in Africa and the Middle East before you do.

IPGL, Mr Spencer’s family investment vehicle, is teaming up with a US financial consultant to put $125m of seed capital into Insparo Asset Management’s first fund, which will launch this month.

The seed investors – which include Exotix, the emerging market broker controlled by IPGL – will receive a stake in Insparo.

The launch is the latest Africa-focused hedge fund created as markets develop across the region and the political situation remains relatively stable. High commodity prices also have underpinned many economies.

Francis Beddington, Insparo co-founder and head of research, said: “There’s an embedded political stability and a lot of it comes from the growth of the middle classes.

“It is growth but this time it is sustainable.”

Mr Beddington and Mohammed Hanif, co-founder and chief investment officer, said the rapid development of financial markets was making it much easier to access Africa and the Persian Gulf.

Mr Hanif has been running a sample $15m portfolio for IPGL for nine months, including investments in Zimbabwe, where he argues that whatever the outcome of the contested election, the dysfunctional economy can hardly worsen.

In the first three months of this year, when many emerging market funds stumbled, the portfolio rose 17 per cent after fees, Insparo said.

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