European investors willing to bet on Bangladesh
Swiss fund focuses on Bangladesh stock market
Equity funds focused on geographic locations is common in the advanced markets all over the world and there are country-focused funds for all emerging markets in different stock exchanges worldwide.
However, when Bangladesh comes into perspective, it is rare to find western investors willing to bet on our imbalanced market. But it was difficult to overlook the impressive growth that our stock market produced in the last two years, leaving out the last few months.
Many European investors locked onto that growth and their willingness led to the creation of “Bangladesh & EM Equity Fund” in Switzerland. The fund is registered as an investment fund under Swiss law for the “other funds for traditional investments” and is directed exclusively towards qualified investors.
Thus it is a private fund rather than a publicly traded one. The fund started off last year’s November with an investment of ten million Euros, putting the money exclusively in our country’s capital market.
The “Bangladesh & EM Equity Fund” is not only registered in Switzerland, but it is also managed by well reputed Swiss financial organisations. The administration of the fund is handled by SoluFunds SA, a Swiss fund management company, while the investment decisions have been delegated to Banque Morval’s Geneva head office.
Recently, Roberto Pusterla, a member of the management of Banque Morval and Aleš Glavan, an advisor of the fund and also a director of Murka d.d, a Slovenian investment management company, came to Dhaka to meet professionals of different fields to discuss the potential future of our market.
I managed to meet them and was frankly surprised, when they informed me that they have more opportunities of funding and are looking on how to change their portfolio structure to gain more value in the future. They showed me that despite a large fall, the fund has still outperformed the DSE General Index. Currently, the fund has maximum investment in the banking, fuel and power and pharmaceutical sector.
The managers wanted to determine what direction to head to now in the delicate situation but as Mr. Glavan stated, “Bangladesh has a huge potential, something a lot of western investors haven’t realised yet. With the right push the markets will hopefully pick up again.” However, he also stated his surprise in the drastic fall of prices of companies with good fundamentals. But from the overall discussions it was certainly clear that if things move to a better direction in our capital market, we might very well expect a new source of FDI in the form of capital market investment.