SG Asset Management, a subsidiary of SociTtT GTnTrale, is launching a feeder fund in Singapore this week, focusing on Asian companies that are growing through e-commerce.
Mahendran Nathan, senior vice president of SG in Singapore, says that as a feeder fund, the Singapore-based Asian New Economy Fund will be managed through a master fund structure. SG's team of seven fund managers in Singapore will manage the Luxembourg-based master fund, Sogelux Equities - Asian E-business Fund, in which the Asian New Economy Fund will invest.
Targeted at small investors, the CPF-approved, capital growth fund has a one-off sales fee of 5% and a management fee of 1%. The Luxembourg fund will charge investors in the Singapore fund an administration fee of 0.8%. Unlike most CPF-approved funds, the Singapore fund will not be managed against a specific benchmark but by investing in e-businesses listed across Asia, ex-Japan.
Instead of focusing on pure internet plays, SG will invest in established Asian companies utilizing e-commerce solutions as well as new Asian internet companies that are involved in e-business. The Luxembourg fund was set up in February and targets institutional investors. It has raised $10 million so far and is aiming to reach $300 million within 18 months.
Nathan says institutional investors are concerned with the market's recent volatility. But unlike small investors who like to buy when the markets are up, institutional investors usually get in while the markets are down.
But is it good timing to launch a tech fund? "The Microsoft case is not likely to affect us because we focus on companies that are not related to the software business. It's companies like SPH (Singapore Press Holdings), banks and financials and industries like that that we're interested in ... companies that have taken the opportunity to expand their business on the internet," says Nathan.
The fund will use six Asian markets as the indicators of asset allocation in the region. They are Hong Kong (32.08%), Singapore (27.74%), Korea (12.20%), Australia (11.93%), India (8.24%) and Taiwan (7.81%).
The fund's major distributors include OCBC Bank, Standard Chartered Bank, Lloyds TSB, and Philip Securities.