$500m South African fund of funds (FoF) firm 27four Investment Managers plans to grow its five-month-old Pangaea Africa Fund to $250-300m – 40% of which is earmarked for regional managers, Africa FM has learned.

According to 27four founder and managing director Fatima Vawda (pictured), the $6m pan-Africa fund has commitments in excess of $50m from South African pension funds. Once the fund reaches $100m and has a one-year track record, 27four will begin to market it to investors in Europe.

“We think our Africa FoF would fill a gap internationally. That was pre-empted at inception – we have registered the fund in Malta, and the first destination we will look to market the fund will be Europe,” she told Africa FM.

Vawda estimated that the fund would be ready to market internationally by June 2012. “We think it is premature to go into Europe right now. We want to go there with a strong story, with sufficient critical mass in the portfolio and with a decent one-year track record,” she said.

According to Vawda, 27four has already begun talking to potential European institutional investors, but must first wait for the local client base to fulfil their commitments to the fund. “We have about $50m of commitments, of which we have only implemented $6m because we only aggressively started taking the fund to the market in about May, and also the decision-making processes at retirement funds take a long time,” she said. “We are beginning to see interest piling up and we should get up to the $50m mark very quickly.”

The Pangaea Fund is currently invested in six managers. “Once we’ve increased our AUM, we will increase the number of managers, although we wouldn’t have more than 12,” said the fund’s portfolio managers Oliver Hoffmann.

He added that around 60% of the fund’s assets will go to pan-Africa managers predominantly based in South Africa and Europe, with the remainder invested in managers with regional specialisations based throughout sub-Saharan Africa.