UK-based Aberdeen Asset Management plc, an asset manager with presence in both the conventional and Islamic finance space, plans to introduce two Shariah-compliant unit trust funds to break into the local retail funds market.
It is now in the advanced stage of its application with the Securities Commission (SC) to launch the two funds, which industry sources familiar with the process said would be another addition to Malaysia’s rich Islamic finance landscape.
“They made their submission to the SC sometime in March and they can expect a reply by next month,” one source told The Malaysian Reserve.
Aberdeen Asset Management Sdn Bhd, the first foreign fund manager to get a domestic asset management licence in Malaysia, and its wholly-owned subsidiary Aberdeen Islamic Asset Management Sdn Bhd have been active in the institutional fund management scene locally, but yet to dip their fingers into the retail market.
The retail unit trust industry, dominated by local giants like Public Mutual Bhd, CIMB-Principal Asset Management Bhd, AmInvestment Services Bhd and Hwang Investment Management Bhd, commanded a total net asset value of RM277.83 billion as at end-June, which accounted for 20.3% of Bursa Malaysia’s market capitalisation. The investments were in 15.8 million accounts handled by 40 management companies managing 609 funds approved by the regulator.
“Aberdeen may want to get a slice of that huge market, but they are probably looking at a small slice as they would not be able to command the number of agents that the local players have,” said a local fund manager.
“Up till now, they have been managing institutional businesses since they started in 2009. These two new funds will see them breaking into the local retail business,” a source familiar with the company said.
On the local front, the Aberdeen group currently has US$3.7 billion (RM11.53 billion) invested in stocks listed on Bursa Malaysia.
It has an 18% stake in superstore chain operator AEON Co (M) Bhd and appears as the top five shareholders in manufacturer of carbonated drinks Fraser & Neave Holdings Bhd, insurer LPI Capital Bhd and diversified Malaysian conglomerate Oriental Holdings Bhd. It also holds shares in Public Bank Bhd, Alliance Financial Group Bhd and insurer Manulife Holdings Bhd.
As for the timing of the launch of the funds, one source said Aberdeen Islamic is "all ready to go" and only awaiting the SC approval.
The funds, said to be the first of its kind in Malaysia, are tailored to be acceptable not only for the local investors but also for the international markets.
A source said Aberdeen plans to sell the funds to overseas investors in the third year, after cementing a strong hold on local investors.