Africa’s investment story is shifting and fast. What once centred on commodities is now increasingly anchored in people, cities, and the systems that support them. A London-based equity fund is proving just how powerful that shift can be.
According to insights reported by Bloomberg, as written by Selcuk Gokoluk and Mpho Hlakudi, the Emerging Markets Investment Management (EMIM) Africa Opportunities Fund has delivered a striking 72 per cent return over the past year. That performance places it among the top-ranked funds globally, not by chasing oil or minerals, but by focusing on banks and telecoms.
A Different Bet on Africa
At the centre of this strategy is Ayo Salami, chief investment officer at Emerging Markets Investment Management Ltd. His thesis is simple but deliberate: Africa’s growth will not be defined by what it extracts but by how its people live, spend, and connect.
As a result, the fund allocates nearly 80 per cent of its portfolio to financial services and telecommunications. This is a sharp contrast to traditional Africa-focused funds, which often lean heavily on commodities like oil and precious metals.
Instead, companies such as Safaricom Plc, Tanzania’s National Microfinance Bank Ltd., and Nigeria’s Guaranty Trust Holding Co. Plc dominate the portfolio. Together, they represent a quarter of the fund’s holdings, an unusually concentrated bet in markets often seen as volatile.
Urbanisation as an Economic Engine
The logic behind this positioning lies in a long-term structural trend: urbanization.
As more Africans move into cities, demand rises for banking services, mobile connectivity, housing, and consumer goods. This mirrors patterns seen in parts of Asia and Latin America, where rapid urban growth unlocked decades of economic expansion.
Urban populations need financial access. They require payment systems, credit, savings tools, and insurance. At the same time, they depend on mobile networks for communication, business, and increasingly, digital finance.
In that sense, telecoms and banks are not just sectors; they are infrastructure.
Why Banks and Telcos Are Winning
The numbers reinforce the strategy. Shares of key holdings have surged over the past year, with some banking stocks more than doubling in value, while Safaricom has posted gains exceeding 70 per cent.
Frontier market banks, in particular, offer an advantage rarely seen in developed markets: high interest margins. In some cases, margins range between 7 and 8 per cent, allowing lenders to generate strong returns without excessive risk-taking.
Meanwhile, telecom companies continue to benefit from Africa’s mobile-first economy, where millions leapfrog traditional infrastructure and adopt digital services directly through their phones.
A High-Conviction Strategy
Unlike diversified funds that spread risk widely, EMIM takes a concentrated approach. Its top 30 investments account for about 80 per cent of total assets.
This strategy amplifies gains when bets are correct. However, it also increases exposure to shocks.
That risk became clear during the recent market volatility triggered by geopolitical tensions in the Middle East. During that period, the fund dropped 5.4 per cent, underperforming peers that remained relatively stable.
Still, before that disruption, the results were strong. The fund delivered an average annual return of 18 per cent over five years and surged 20 per cent in the early months of 2026—well ahead of broader frontier market benchmarks.
A Broader Market Context
The fund’s performance also reflects a wider rally in African equities.
Markets such as Ghana, Zambia, and Nigeria have recently recorded some of the strongest returns globally. In fact, Ghana’s benchmark index rose by over 200 per cent in dollar terms over the past year, highlighting renewed investor interest in frontier markets.
Even so, these gains come with caution. African markets remain relatively small and less liquid, making them more sensitive to global shocks and investor sentiment shifts.
This article draws on research and insights from Selcuk Gokoluk and Mpho Hlakudi’s Top Performing Africa Fund Wagers on Urbanization to Drive Gains article.
