Fortis Investment Management yesterday launched its first onshore mutual fund business in Asia, offering a Luxembourg-listed umbrella fund to Hong Kong retail investors, and has planted the seeds for courting Asian institutional investors. Stewart Edgar, a Scottish export to Brussels, where he serves as managing director of Fortis Investment Management, swung through Hong Kong to celebrate the launch. He says Fortis shall no longer only manage Asian securities from Europe, but cultivate local business across the region.
First is the retail business in Hong Kong. Through Fortis Bank and affiliates Banque Generale de Luxumbourg and private bank MeesPierson, Fortis is offering 15 funds from its open-ended umbrella fund, called Fortis L Fund. 11 of these are sector funds, which Fortis claims is lthe argest such selection now available in Asia. Third-party distribution channels are under negotiation as well. Fortis manages $110 billion globally.
Up to now, Fortis has only had research analysts in Hong Kong who picked stocks for the Brussels-based portfolio managers. Hong Kong CEO Tian Ren-can has begun piecing together a sales and marketing force to sell Fortis' European and US equities experience to local institutions. Edgar believes it will require a good two years to start impressing consultants and woo big-ticket clients.
In the meantime Fortis is moving on other fronts. It is forming joint ventures in Singapore and Malaysia to distribute Fortis funds locally. And Edgar today goes to Shanghai, where just last week Fortis established a rep office, which officially opens at the end of the year. The bank is now trying to forge a joint venture with Chinese securities companies or fund companies.
Fortis L Fund includes performers such as a biotech vehicle, which is up 418% over the past two years, and a tech fund that rose 305% since September 1998. Other sub-funds include Equity Prestige World, for investors keen on shares in luxury goods and services companies. Up-front subscription fees run at 5%. There is no redemption fee for redeeming sub-funds under the umbrella. Annual management fees are 1% except for two regional sub-funds investing in Greater China and US mid-caps, which are 1.25%.