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Iran opens doors to investors with latest fund launch

Fund managers in Iran are poised for what they hope will be a wellspring of interest from international investors as last week's lifting sanctions should allow foreign investment in the region for the first time in over three decades.

Griffon Capital, the Iran focused asset management group launched its first equity fund open to foreign investment on Monday, with hopes to raise 100 million euros ($108 million) by the end of the year.

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Iran has two equity exchanges, the Tehran Stock Exchange and the Farabourse, with a combined total of 300 actively traded companies and a market capitalization in the region of $100 billion.

The group's fund, the Griffon Iran Flagship Fund will invest in companies listed on both exchanges and is aimed at U.K., European and Gulf based high net worth and institutional investors.

"The lifting of sanctions on Iran has created an unprecedented opportunity for investors. The Iranian economy has strong fundamentals and is expected to grow at an average rate of 4-6 percent per annum over the next five years," said chief executive of Griffon Capital, Homan Harandian.

The group said it is seeing significant investor interest in Iran in a significant pipeline of initial public offerings (IPOs) and privatizations expected in the next two to three years.

The Iranian market is dominated by chemicals and by-products, which make up over 20 percent, followed by monetary intermediation and basic metals.

"Implementation Day" which took place last Saturday means nuclear-related sanctions against Iran have been lifted, and that Western countries can now trade freely with Iran.

Griffon's launch follows that of U.K. based asset manager Charlemagne Capital, with teamed up with Tehran based stock broker Turquoise Partners to launch its Iranian securities fund last week, after announcing plans for the fund last summer.

Last week, in the first week following the lifting of sanctions the Tehran Stock Exchange was up almost 8 percent since the start of January 2016.

As concerns surrounding global growth, uncertainty in China and fresh lows in oil prices have gripped markets since the start of the year, the S&P 500 is down over 6 percent, while London's FTSE slipped in bear market territory last week, down 20 percent from its highs in April last year.