Reliance Capital Asset Management has partnered with specialist funds distributor Cohesion Investments for the launch of a new India Equities Portfolio fund.
The new Luxembourg domiciled fund will be advised from India by Sunil Singhania, chief investment officer at RCAM and will be Cohesion’s first Ucits vehicle for the UK market.
The new fund will be driven by the same philosophy and process behind the firm’s flagship UK fund; the Reliance Growth fund, which has 20 year track record.
The new fund will target around 40-50 stocks, across all market caps and has a minimum investment of US$10,000. It has been launched with assets of US$50m and has an annual management charge of 1.25%, with no performance fee. It follows the route of the Cohesion India Best Ideas fund (a non Ucits Sicav), launched by Cohesion in partnership with Reliance last December, that was aimed at the ultra high net worth market.
The firm said that it is targeting the broader discretionary fund management community with the new launch.
Spike Hughes, chief executive at Cohesion, said that he believes that India deserves its own place in client portfolios with a “multi-trillion dollar investment opportunity” and said that investors should be making a “direct and meaningful allocation” to the market.
“In my opinion, investing in India via ETFs or via GEM funds gives you access only to the largest companies listed on the Indian market, and not the stocks which could provide ‘multi bagger’ returns over the next market cycle, which we see as a growth cycle,” said Hughes.
“Why? Because the bulk of the stocks are not covered by brokers, and to access these opportunities a manager needs to be on the ground in India, close to the action and immersed deeply in the Indian economy at a local level.”
Hughes added that grouping India in with other emerging markets is not the correct way to access its “multi-decade growth” story and that investing in a broad GEM offering may heavily dilute an investor’s exposure to India’s true growth story.
“Personal experience tells me that the most sensible way to access this market is to be aligned with a domestic Indian fund manager with a large and proven on the ground presence in India, not trying to second guess what is going on from faraway foreign shores,” he added.