Franklin Templeton Investments is launching the Templeton Africa fund, a sub-fund of its Luxembourg-registered SICAV range, available in the sterling share class as UK investors display a “considerable appetite for frontier markets”.

The open-ended fund invests in African equity securities or companies based elsewhere but which have their principal business activities in Africa, the firm said in a statement. 

Mark Mobius, executive chairman for the emerging markets group and lead portfolio manager, said Africa’s market offers “significant” development opportunities as a result of strong economic growth, in addition to rising demand for the region’s natural resources and a growing consumer market.

With sixty per cent of the world’s uncultivated arable land located in Africa, the continent is projected to grow at an annual rate of more than 7 per cent over the next 20 years as global demand for hard and soft commodities escalates, Mobius explained.

Moreover, the number of African households earning over $5,000 is set to swell from 85 million to 128 million, and a “relatively young population with rising purchasing power” should also stimulate growth, he said.

The fund has gained verbal approval from Luxembourg's regulatory authority, the CSSF, but remains subject to FSA registration.