Russell Investments is set to launch a second emerging markets fund, and may launch GCC and Saudi-focused funds before the end of the year, Mena FM has learned. The news comes as the company’s 14-year old Russell Emerging Markets (REM) fund reaches capacity, with AUM of approximately $4bn.

“Our first [emerging markets] fund has $4bn now, so we’re closing that fund to new investment and opening a new emerging markets fund,” Pascal Duval, president of EMEA at Russell Investments, told Mena FM. “The new fund will have a different investment strategy.”

The original REM fund takes a multi-manager approach and employs UBS Global, Genesis, Arrowstreet, Harding Loevner, Victoria, Bernstein and Somerset Capital Management. Duval added that the manager selection process for the new emerging markets fund will begin again from scratch. “It is a completely new process,” he said. “We may find commonality but we may not.”

The new investment strategy will use a combination of global and regional mandates intended to create more of a regional weighting as opposed to a global one, Duval added. “We are working on creating a GCC fund and maybe a Saudi fund as well,” he said. “It’s difficult to gauge a framework for the launches at the moment, but I would think they will be launched before the end of the year.”

Earlier this year Russell announced its intention to expand into Mena, with a multi-billion dollar plan to invest in the region’s fund managers, and launch a new index. In June, Russell analysts began a manager selection programme, visiting ten fund managers in the UAE, Saudi Arabia, Oman and Bahrain.

“The strategy for Russell is we invest into this region,” says Duval. “We believe this region has a present and a future, and from an investor perspective, it needs our services.”

The company hopes to open its first Mena office in Dubai by September, and is in the process of hiring senior staff to run the regional operations.