Africa – outside of South Africa and the Middle East- presents a huge opportunity for adventurous investing types and there is a dedicated regional fund called the Africa Opportunity Fund (AOF) listed on the LSE, which has performed OK over the last few years. Its great advantage is its active and experienced fund managers and its diversified approach. On the downside it trades at a big discount and has had some stock specific issues that have knocked investor confidence.

Alternatively, adventurous types might find themselves tempted by more specific investments which try and play on a specific theme, namely ‘recovery’. Many of the biggest successes in frontier markets have been from what one could call long patient investing in difficult markets. Smart investors frequently head into a slowly reforming developing country long before the main market. They then wait for a steady increase in confidence as the local economy opens to the outside world.

Mongolia in Asia was a classic example with Myanmar the current favourite. In Africa, the ‘recovery’ play is on Zimbabwe – although it is worth noting that it has been a recovery play for more than a decade. Investors with a long memory for failure will remember an outfit called LonZim, backed by the then owners of Lonrho which was supposed to be a way of playing the end of Mugabe. Sadly for foreign investors – and his own people – Robert hung around for a lot longer than everyone expected, and eventually LonZim faded away and from memory turned into a mining business.

The good news is that there is a new president in this once mighty economic powerhouse, Emmerson Mnangagwa. The bad news is that he’s still from the same old elite – the ZANU party – and has a reputation for “firm leadership” which is of course something of a euphemism. Nevertheless there is cautious optimism in the air and I think Zimbabwe has its best chance for decades of re-emerging as a strong economy. There are a million and one things that could go wrong along the way but it does seem the new leadership have realised that financial stability and a clearer ownership framework is required to lure in foreign direct investment. In the meantime, it strikes me that existing joint ventures should thrive as long as they the foreign investors can continue to get along with their local, indigenous local co owners.

Which brings me nicely to Caledonia Mining which strikes me as an interesting triple play. On a pure valuation basis, this local gold miner’s shares are cheap and produce a decent 3.3% yield. There’s plenty of cash on the balance sheet and its solidly profitable. There’s also the gold play – the Blanket mine’s all in cost of production is around $832 an ounce (it produced 12,924 ounces in the last quarter) but it’s selling the shiny stuff at around $1300 an ounce. I am no gold bull – far from it in fact – but even I think we are due some increased market volatility and that gold prices might increase if the global financial systems starts to look vulnerable. So, Caledonia is a useful hedge against future trouble. Last but by no means least there’s the last play – on Zimbabwe. If it does recover, there’s a chance that the government might allow foreign investors to increase their equity stake in local businesses which could be good for UK based investors in Caledonia.