Posted inNews

‘Disruptive’ fund to debut in Singapore

The Nikko AM fund seeks early stage disruptors and is sub-advised by New York-based Ark Investment Management.

Nikko Asset Management is expected to launch the Nikko AM Ark Disruptive Innovation Fund in the Lion City, according to records from the Monetary Authority of Singapore (MAS).

The firm is still waiting for approval from the MAS, the regulator’s records show.

The fund was first launched in Australia in September last year and is sub-managed by Ark Investment Management, according to a previous statement.

The product aims to provide investors  access to listed early-stage and emerging companies companies “without the high costs and illiquidity typically associated with similar investments accessed through venture capital funds”, according to the fund factsheet.

Ark is an affiliate of Nikko via an equity stake, which the Japanese firm acquired in August 2017. The US firm specialises in thematic investing in disruptive innovation and managed $5.9bn in assets as of the end of June last year.

Previously, the two firms partnered to launch a fintech equity fund in Japan. Ark IM serves as the sub-advisor to Nikko’s Global Fintech Equity Fund, which was launched in December 2016.

Nikko AM has seen a number of developments this year. Last month, the firm became one of the first Japanese managers to join the Japan-China ETF Connectivity scheme with the launch of the Listed Index Fund China A Share (Panda) E Fund CSI 300 fund in Japan, according to records from the Japan Exchange. Under the scheme, Japanese and Chinese ETF providers can create feeder ETFs to invest in Chinese or Japanese asset classes.

Also last month, it appointed Rob Mann as Singapore-based head of Asia (ex-Japan) equities. He will replace Peter Sartori, who will be leaving the firm in September to pursue other opportunities, according to a statement from the firm. Mann has been with the firm since 2013 as a senior portfolio manager and macro specialist.

In London, the firm added to its global equities team with the appointment of Michael Chen as an analyst. Before Nikko, he was at Schroders.

Globally, the firm manages around $214.1bn in assets.

The disruptive fund 

The Nikko AM Ark Disruptive Innovation Fund is a Luxembourg Sicav Ucits fund that had $19m in assets at the end of May, according to the fund factsheet.

The global fund invests mainly in US equities (85%) that are relevant to the investment theme of disruptive innovation, which the firm defines as the introduction of a technologically-enabled product or service “that changes an industry landscape by creating simplicity and accessibility, while driving down costs”.

These include genomic revolution, industrial innovation, internet and fintech companies.

The fund is highly concentrated, with the top 10 holdings accounting for nearly 60% of its assets. In total, it invests in around 45-60 names.

Source: fund factsheet
Source: fund factsheet

Thematic push

Nikko AM joins a number of firms who have been pushing thematic products in the region.

Last month, UOB Asset Management launched the United Global Innovation Fund in Singapore.

Amundi Asset Management is preparing for the launch of the Global Education Opportunities Equity Fund in Hong Kong, which will replicate its wholly-owned subsidiary CPR Asset Management’s Invest Education Fund.

Earlier this year, Blackrock received approval from the Securities and Futures Commission and the MAS to launch at least three thematic funds, while Allianz Global Investors also registered three thematic funds in Singapore.

Hong Kong-based Value Partners launched in February the Asian Innovation Opportunities Fund, which is a mixed-asset fund.

Not all distributors are convinced about thematic products, however. Pierre DeGagné, Singapore-based head of fund selection at DBS Private Bank, for example, said recently that the bank steers away from products that revolve around specific concepts and prefers broader themes.

Part of the Mark Allen Group.