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Investec Asset Management has a reputation for the exotic. Fund launch watchers will have spotted two new Middle East and Africa funds in April, followed by a natural resources hedge fund in May. Both cover little-charted territory in the retail universe. In the wider market, Investec has attracted attention this month by teaming up with a Saudi manager to create a Shariah-compliant Africa fund – the first of its kind in the Middle East.

Africa and natural resources are both themes that have flourished since the credit crunch, as they promise returns not closely correlated with global capital markets. Indeed JPMorgan Asset Management, New Star Asset Management and Société Générale Asset Management have all recently launched Africa funds.

But Hendrik du Toit, who founded Investec in South Africa in 1991, stresses his company is “investment-led, not market-led”.

“We’ve been involved in pan-African investing for four years,” he says. “It has been a very exciting call for us to come back to Africa. We made that call and we backed it up with client money. Now we’re the biggest investor of third-party assets on the continent, both including and excluding South Africa.”

Investec’s natural resources team also pre-dates the current boom. “The oil price was very low 10 years ago, but we still thought it worthwhile to start our energy fund,” Mr du Toit says. Since 2006, however, he has significantly added to the company’s expertise, in particular by hiring metal-shorting specialist Bradley George from Goldman Sachs to head the desk.

“We decided we needed to build hedging capabilities in natural resources. Commodities markets are subject to a lot of inherent volatility, and we wanted to be able to manage and benefit from that,” says Mr du Toit. The result is the Global Commodities and Resources Hedge fund, launched in Guernsey in January 2007 and moved onshore as the Enhanced Natural Resources fund last month.

Africa – under the “frontier markets” banner – and commodities are two of Investec’s six investment teams. The others are labelled 4factor, contrarian equity, fixed income and multi-asset.

4factor is named after the approach Investec developed specifically for global equity investing in 2000. Fund managers have traditionally put together global portfolios by aggregating the expertise of regional desks. But recognising that globalisation is making regional expertise less and less relevant, many fund houses have recently reorganised their equity teams on a non-regional basis.

“If you look at all the Russian companies listed on the London Stock Exchange, you see it’s not just the UK market,” notes Mr du Toit. “We saw that long before most other managers. Now global equity is a major growth area. The Americans and Australians are pushing more money internationally, sovereign wealth funds invest globally, and the energy-rich countries with large cash surpluses all invest outside their home markets.”

Investec offers six funds to UK retail investors within the global growth category – its single largest contribution to an IMA sector. The largest of these is the £602m Global Free Enterprise fund, which returned 38.8 per cent over three years to 2 June, below the sector mean of 40.1 per cent but in the second quartile.

The most recent addition to the global fleet is the £9.3m Global Extension fund, launched in July 2007. As a fund that can take short as well as long positions, it forms part of last year’s flurry of 130/30 product launches. But the future of the fund remains to be seen: it finished bottom quartile over three months to 2 June.

David Aird, Investec’s head of UK distribution, points out performance of 130/30 funds across the market has been underwhelming. “Most 130/30 funds come from the quant world, and quant managers had a hard time in Q4 last year and Q1 this year,” he observes.

Mr Aird admits Investec’s performance problems on its “contrarian equity” desk are entirely individual, however. Alastair Mundy, who heads the team, manages two key products: the £1.2bn Investec Cautious Managed fund – the company’s largest in the retail segment – and the £149m UK Special Situations fund. Both rank in the bottom quartile for three years to 2 June.

“Alastair had a shocking year last year,” concedes Mr Aird, explaining the contrarian team had an overweight position in retailers and an underweight in mining. “So we did a 16-stop UK road show in January and February. We spoke to 700 IFAs and apologised for our performance.”

Mr Mundy invests by screening for large-cap stocks that have fallen 30 per cent, on the basis that shareholder activism or a takeover bid would necessarily provoke a re-evaluation of such a depressed share price. Investec can point to the last three months as evidence this value approach has started delivering again: both funds have crept into the second quartile for the period to 2 June.

According to Mr Aird, the license to take high-conviction positions – even if they fall foul of the markets – is essential to Investec’s “multi-specialist” culture.

“We give our teams the freedom to create a business within a business. We occupy the middle ground between the boutiques and the banks. The boutique model is very appealing. But you don’t have the infrastructure to tap sovereign wealth funds or family office clients, for example,” he says.

A major advantage of the multi-boutique model is profitability. Investec Asset Management announced record operating profit of £77m – a margin of 35 per cent – for the year to 31 March, up from £68m, while assets shrank from £29.9bn to £28.8bn.

Mr du Toit offers two explanations for this apparent contradiction. The first is the decline of the rand against the pound, which deflated the South African business unit. The second is a strategic move into higher margin, specialist products. “We’d rather have a $500m hedge fund than a $5bn money-market fund,” he says.