The LO Funds – Asia Consumer fund will be part of the group’s Luxembourg-domiciled Sicav. It will be managed by Didier Rabattu and his team, who also manager the group’s $1.1 billion LO Funds – Emerging Consumer fund. The fund was launched in November 2011 and is around 10% ahead of the wider offshore specialist equity sector since launch.
The fund aims to exploit the development of the middle class across Asia and its impact on spending patterns across the region. Asia has 60% of the world’s population, but spending on consumption is lower than the rest of the world. As the region’s economies switch from export-led to domestic-consumption driven growth, it will create opportunities, argues the group.
Mr Rabattu says: “With three-fifths of the world’s population and booming middle classes, Asian incomes and spending are inevitably on the rise. Minimum wages in countries such as Indonesia and Vietnam have grown massively in recent years and Chinese households with incomes of over $10,000 a year are more and more numerous.”
The fund will hold 40 to 60 companies prioritising companies with significant market share, high return on capital, strong balance sheets and quality corporate governance. It is actively-hedged with an annual fee of 0.9% and a minimum investment of €3000 or equivalent for the (USD) P A share class.