Tisco AM seeks offshore equity, hedge managers

Thailand’s Tisco Asset Management plans to launch more active foreign investment funds (FIFs), notably thematic and hedge funds, with the latter expected to be allowed in the local market next year. This comes amid growing interest in overseas assets as returns on domestic investments are weaker than in the past.

Tisco AM, which has $5 billion in assets under management ($1 billion of which is in mutual funds), already provides a range of FIFs, mostly passively managed products.

“The next stage is more active and thematic funds,” noted Saharat Chudsuwan, head of marketing for mutual and private funds at Tisco AM. “The upside in the Thai market is still limited and there are still so many risks, including fundamental and political ones – hence we see interest in foreign investments.”

Offshore equity funds are growing in popularity among Thais. Equity FIF assets have doubled to $6.3 billion from $3.2 billion in the 10 months to the end of October, while fixed income FIF AUM has fallen 12%. The local mutual fund market has $114 billion in total AUM, of which about a fifth ($22 billion) is invested in FIFs.

Chudsuwan is responsible for choosing offshore funds and managers in collaboration with his counterpart at parent company Tisco Bank. He said Tisco AM was open to staying in touch with and partnering offshore asset managers and private banks, with the latter group offering investment ideas and products including mutual funds.

Providing active thematic and hedge funds isa natural progression for the firm and provides diversification to its investors, he noted. The firm will offer them in feeder fund and fund-of-fund structures.

Chudsuwan said thematic funds would capture the key mega trends in investment, such as in robotics. Tisco AM launched a healthcare fund this year, but he declined to specify which themes it was considering for 2016.

Meanwhile, the Thai Securities and Exchange Commission has indicated that it will soon allow hedge funds to be sold domestically, Chudsuwan said, and he believes both local and FIF hedge funds will be permitted.

In the past two years Tisco AM has launched three offshore Reits investing in US, European and Japan markets, with a combined AUM of $25 million, and three actively managed FIFs investing in global equities, China equities and global healthcare, with a combined AUM of $70 million.