Ghana’s First Hedge Fund Planned by Ex-Exchange Regulator

Jun 25, 2014 11:11 am ET

(Updates with cedi price in 4th paragraph.)

June 25 (Bloomberg) -- Tikowrie Capital Ltd., a Ghanaian money manager started by a former regulator, plans to establish the West African country’s first hedge fund.

“The appetite of investors in the country has grown over the years,” Tikowrie Executive Director Maxwell Gidi said by phone from Accra yesterday. “They’re looking for more sophisticated avenues of investment.”

Gidi, 37, said he quit his job as assistant manager of the broker-dealer department at Ghana’s Securities and Exchange Commission, where he worked for seven years, to start Tikowrie six months ago. The money manager, which opens the hedge fund to investors from tomorrow, seeks to raise more than 5 million cedis ($1.5 million) in the next three weeks and expand to have assets of 30 million cedis to 50 million cedis in three to five years, he said.

Tikowrie begins its fund as the cedi lost 29 percent of its value against the dollar this year, the worst performance among 24 African currencies tracked by Bloomberg. Stocks in the world’s second-biggest cocoa producer are headed for their lowest returns in three years. The currency weakened 4.3 percent to 3.35 per dollar by 2:53 p.m. in Accra. The 35-member GSE Composite Index rose 11 percent this year after surging 79 percent last year and 24 percent in 2012.

The hedge fund will trade in U.S., Canadian and Australian dollars as well as the euro, British pound and yen, Gidi said. It will also buy and sell gold, copper and palladium and trade in sovereign debt through London-based CFH Clearing Ltd., its prime broker.

Law Studied

The SEC is reviewing Ghana’s laws to enable the regulation of hedge funds, private-equity firms and venture-capital investors, Emmanuel Ashong-Katai, head of policy research and information technology at the Accra-based regulator, said by phone. Regulation will encourage more of these funds to start, he said, adding that Tikowrie’s hedge fund will be the first of its kind in the second-biggest West African economy.

A draft of the new securities-industry policy is being studied by the government’s cabinet and is expected to be passed by lawmakers before the end of the year, Adu Anane Antwi, director general of the SEC said by phone.