MUMBAI: Singapore-based asset manager Milltrust International has tied up with UTI International, the offshore asset management arm of UTI Asset Management, to launch its first equity fund. This is Milltrust’s fourth emerging market fund after launching focused schemes for investing in equities in Latin America, Brazil and Greater China.
The fund, according to sources, has already received investment commitments worth $40 million from two pension funds. Investing through ‘managed-account platforms’ is a relatively new concept. This strategy reduces the chances of mismanagement of funds by asset managers.
In managed-account investing, the fund manager (in this case UTI International) has to only make the investment decision. The fiduciary role of using the money to buy shares and holding shares in depositories is entrusted with an independent firm which reconciles and oversees portfolio risk, investment guidelines and legal and compliance requirements.
“Investment through the ‘managed account’ route is known to provide better transparency and control. Therefore, it is the preferred mechanism of investment, particularly by smaller institutional investors, who do not have large single-country exposure,” said Praveen Jagwani, CEO of UTI International.
The UTI fund would be run on Milltrust’s managed-account platform, domiciled in Dublin and the fund will be compliant with the European Union’s UCITS IV directive. Being an UCITS (undertakings for collective investment in transferable securities) fund, the scheme will be distributed to investors across Europe and Asia.
According to Jagwani, smart global investors, who are willing to take a long-term view on Indian shares, would prefer to invest in a cautious manner.
“The crucial parameter while considering allocation to India has been the currency. The volatility of the Indian rupee has made investors anxious. However, those who can take a longer term view are confident that the rupee may appreciate to 52/53 levels in the next 6-9 months and the index may stay above 18,000 levels,” he said.