Bangkok-based TMBAM Eastspring has made at least THB 68bn ($2.19bn) of repayments to investors for the four funds it closed in March, according to a statement from the firm.
“TMBAM Eastspring closed four fixed income funds amidst the considerable market turmoil created by the Covid-19 pandemic that resulted in unprecedented spreads and unusually high outflows,” Boochai Kiattanavith, interim managing director of TMBAM Eastspring and managing director of Thanachart Eastspring, said in the statement.
At the time of the fund closures, the Aggregate Bond Fund and the Ultra-Short Bond Fund had outflows equivalent to 49% and 71%, respectively, of their AUMs. Meanwhile, the Thana Plus Fund and the TMB Bond Fund each had massive outflows of roughly 67% of AUM in the ten days before their closures.
The liquidated amount is equivalent to 34-55% of assets in each fund since the fund closures, according to the statement.
“Regrettably and due to the unprecedented and extreme volatility, we had to make the difficult decision to suspend and close the four funds,” Kiattanavith said.
Kiattanavith noted that there was no default in the underlying assets of these funds, all of which were invested in investment-grade bonds.
He added that the firm was able to maintain the value of assets invested by unitholders close to that on the last trading day of the funds.
“Overall, bond prices have improved from the last trading day of these funds, allowing fund managers to gradually liquidate part of the portfolio at a fair and reasonable price. However, market conditions have not fully recovered to pre-Covid-19 levels.”
He explained that accelerating the liquidation process of the remaining THB 80bn in the four funds, without consideration for timing and market liquidity, could result in lower than expected proceeds for unitholders.
In order for unitholders to receive a fair and reasonable amount form the sales of assets, the firm has requested and received an extension from Thailand’s Securities and Exchange Commission (SEC) of the liquidation period for another 90 days, to the new date of 7 October 2020 from the previously scheduled liquidation complete date of 9 July 2020.
Since the fund closures, the firm has not charged any fees in relation to the management of these assets, the statement noted.
The closures and liquidation of the four funds also have no impact on the management of other funds managed by TMBAM Eastspring, it added.
The TMBAM Eastspring brand was created after the acquisition of 65% of Bangkok-based TMB Asset Management from TMB Bank in September 2018.
TMB Eastspring is the sixth largest fund manager in Thailand, managing THB 199bn in assets as of the end of June, according to data from Morningstar Direct.
