The group has referred to it as a "promotion and referral agreement" through which Threadneedle investors will be introduced to Stanlib's Africa strategies, including Africa ex-South Africa Equity – a strategy focusing on the continent's frontier markets, and global emerging market property and direct property investment opportunities managed by Stanlib.
Stanlib, which manages more than $45bn across retail and institutional clients, will also actively promote Threadneedle's investment capabilities to African investors.
The distribution deal builds on an existing relationship. In August 2012, Stanlib selected Threadneedle to manage roughly $800m in global and emerging market equity and global balanced portfolios as part of its offshore investment range. Today, Threadneedle manages in excess of $1bn on behalf of Stanlib.
Untapped markets
Michael Housden, head of Middle East and Africa distribution at Threadneedle said the arrangement would allow its clients access to some of the "fastest growing and still largely untapped markets in the world".
"We expect to see increasing demand from investors for exposure to Africa given the tremendous growth opportunities the continent offers. Equally we believe investors in Africa will be attracted to Threadneedle’s excellent track record of outperformance across asset classes," he added.
Dylan Evans, head of international business development at Stanlib said Africa’s economy is around $2trn, expected to reach $2.6trn by 2020.
"The continent counts some of the world’s fastest growing economies. Yet, very few of the largest 200 pension funds in the UK and Europe are known to have any dedicated exposure to Africa.
Diversification is key
"Of course, Africa is not without its risks and high among these is political risk. Evidence of that was clearly apparent in North Africa in 2013, where political unrest led to volatile performances from both Egypt and Tunisia. However, a well-diversified African portfolio can be profitable for investors even when individual markets are under pressure, different African markets being driven by different dynamics."
He said the outlook for the year ahead looked promising, with Africa's GDP expected to grow by 5.5% in 2014, creating many opportunities for investors with a higher degree of risk tolerance and a long-term investment horizon.
