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Investec stems flows into Asia equity strategy

Investec stems flows into Asia equity strategy

Investec Asset Management is slowing flows into its Asian Equity funds, with assets in its offshore vehicle alone amounting to over $2 billion.

The move to stem flows in the Luxembourg-domiciled Investec GSF Asian Equity fund, managed by Greg Kuhnert, is aimed at protecting the rights of existing shareholders. The strategy also includes a £120 milllion onshore version of the fund.       

David Aird, managing director of UK, said the firm does not soft-close funds, but works on a traffic light system that alerts them when a strategy becomes big and warrants flows to be managed tightly.

‘We are saying to clients we are aware we need to keep an eye on flows coming in,’ said Aird. ‘So we don’t market the fund heavily. But we never soft or hard close a fund.

‘When a fund closes you’ve done a poor job and not managed flows very well. We think it’s an unprofessional way of behaving.’

He also added the firm does not lift initial charges to help stem flows, as this is ‘one way to alienate clients.’

The developments comes after rival asset management firms restricted flows into emerging market funds.  

Earlier in the year, Aberdeen moved to stem flows into a range of its Global Emerging Markets funds, run by Citywire A-rated Devan Kaloo.

The funds include the $9.8 billion (£6 billion) Luxembourg-domiciled Aberdeen Global Emerging Markets Equity fund and the £2.7 billion UK-domiciled and Citywire Selection Star pick Aberdeen Emerging Markets fund, both run by Devan Kaloo and his team.

Last year, First State Investments announced the soft-closure of a range of its emerging markets funds, including Asia Pacific Sustainability, Indian Subcontinent, Global Emerging Markets Sustainability, Latin America and Greater China Growth.

Over three years to 12 October, the Luxembourg-domiciled Investec fund has returned 27.1% versus the benchmark’s 20.3%.

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Devan Kaloo
Devan Kaloo
28/68 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 11.28%
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17/59 in Equity - Asia Pacific Excluding Japan (Performance over 3 years) Average Total Return: 32.45%
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