The Sri Lanka Fund has been seeded with US$ 2mn in total by the promoters Ceylon Guardian Investment Trust PLC and Ceylon Investment PLC in August 2010. Currently the Fund has been structured to represent the growth sectors of the economy covering banking, hotels & travels, retail and infrastructure related sectors.
Hence the much needed fund value has been increased and the portfolio restructured to substantiate the case to attract new investors to the fund. The current portfolio is structured to exploit growth opportunities in the changing dynamics in Sri Lanka after the end to the 30 year conflict in the island.
The current policy changes of the Government with the opening up of the Capital account to both individuals and corporate is likely to see activity via cross border transactions. Hence we envisage both foreign inflows and outflows to increase for equity investments thus prompting the attractiveness of such funds as the Sri Lanka Fund to investors. Hence the Sri Lanka Fund could be marketed to resident/nonresident Sri Lankans, funds of fund investors and individual foreign investors wanting to flavor emerging markets and in turn tolerate a higher risk premium identified with such markets. The investors should have the ability to invest in US dollars open both to investors locally and internationally. The Sri Lanka fund has been sanctioned by the Securities and Exchange Commission as a foreign fund operating in Sri Lanka and also registered under the Monetary Authority of Singapore (MAS) as a restricted foreign scheme.
The Sri Lanka Fund, the oldest country fund is promoted by the Carson Cumberbatch Group through its investment Companies Ceylon Guardian Group (Ceylon Guardian Investment Trust PLC and Ceylon Investments PLC) the country’s largest listed equity fund with assets under management of over US$ 300 mn. The funds are managed by Guardian Fund Management Limited with a proven track record of managing the Guardian Funds where constantly has out –performing the All Share Price Index benchmark return year on year.
The total value of the fund amounts to US$ 2.9 Mn as at 30thNov 2010 with a net asset value per unit of US$ 1.03. The fund has over-performed the benchmark All Share index since relaunching in August 2010 with the Net asset value per unit growing by 30% from US$ 0.79 to US$ 1.03 end November 2010 vis a vis the All Share Index appreciation of 26% during the same period.
Our investment process is driven by fundamental analysis and in depth research. We have re-launched the fund internationally and looking to raise capital for listed equity only keeping with the priority of maintaining liquidity for the investors. We believe in an aggressive style of bottom up stock selection of companies exposed to growth sectors of the Sri Lankan economy where companies with competitive sustainable business models backed by good management. A bottom up approach of stock selection is applied, where individual company fundamentals take precedence over asset and sector allocations of the portfolio.
We as the managers of the fund see opportunity in marketing the fund given the changing dynamics both locally and globally. Hence we plan to put in place the structure to mobilize funds from both local investors and foreign funds/investors to SLF as we are confident that it’s a question of time before investors begin to see to attractiveness of the Sri Lankan equity story and thus the attractive valuations in the long term.
