Candor Asset Management launches listed fund: IPO opens on 20 October

Candor Asset Management Ltd. (CAM) has announced the launch of its first listed fund, the Candor Opportunities Fund. 

The Candor Opportunities Fund will become the second listed fund on the Colombo Stock Exchange and would offer 50 million units at the initial offer or IPO with the option of increasing the number of units on offer to 75 million. The IPO will open on 20th October 2015 and will remain open until 4.30 p.m. on 9th November 2015 or until the offer is fully subscribed; in the event of an over-subscription the offer will close at 4.30 p.m. on the same day on which it is fully subscribed.

A unit is priced at LKR 10/- during the IPO period and the minimum investment in the Fund is LKR 1,000/- making this Fund an attractive investment option to retail investors. The Fund will be a 5-year close-ended fund which would adopt dynamic asset allocation strategies and invest in both listed shares and fixed income securities depending on the investment climate.  This strategy is expected to limit any downside risk while capitalizing on upward movements in the stock market. While the primary investment objective of the Fund is to achieve long-term growth of capital, the Fund will also provide annual income to unit holders by way of annual dividends. 

Commenting on the IPO, Mr. Ravi Abeysuriya, CEO of Candor Asset Management (Pvt) Ltd said that the Fund Manager does not have to manage redemption-related liquidity, thereby enabling the fund to be fully invested as well as to make longer term investments.  The ability to shift funds between the equity market and debt markets enables the Fund Manager to preserve capital more effectively while giving the flexibility to capture better returns. 

The Fund is suitable for investors who:

• Have an investment time horizon of 3 to 5 years;
• Do not have short-term liquidity requirements;
• Want exposure to Sri Lankan equities;
• Require annual dividend income over the life of the fund;
• Want exposure to a professionally managed fund.

Unit Trusts are the ideal investment vehicle for investors who may not have the time and the expertise to invest directly in the stock market. Unit Trusts provide the benefit of professional investment expertise and the convenience of investing in a managed fund.  The interests of unit holders are safeguarded by a Trustee, and the Fund is regulated by the Securities and Exchange Commission of Sri Lanka.  Unit Trusts enable investors to become stakeholders in some of Sri Lanka’s top corporate entities at a relatively small investment.

Why Candor Opportunities Fund?

• The Sri Lankan equity market moved into new growth phase after ending a three decade long war in 2009; the All Share Price Index provided a 6 year compound annual growth rate (CAGR) of 15.7% from 30th September 2009 to 30th September 2015.
• Political stability and good governance to drive local and foreign investor confidence. 
• Sri Lankan economys is expected to grow in excess of 5% in the next 2 years. 

The Candor Opportunities Fund is a closed ended unit trust which is not subject to the risk of early redemption as in regular open ended funds that are prevalent in Sri Lanka.  

• Investors of the Fund benefit from lower transaction/trading costs when trading units in the secondary market, in comparison to costs related to trading in shares listed on the stock exchange.  
• Investors can enter and exit the fund at any time by buying and selling units on the CSE secondary market
• As a fund with a dynamic asset allocation strategy, the Fund Manager can limit the possible loss in the event of a downturn in the equities market by shifting investments to debt securities in order to preserve capital.  Theoretically, this approach should be able to generate higher returns at lower risk than investing solely in equity or fixed income because it has the flexibility to capture the best returns available during the investment cycle.   
• The Fund is managed by Candor Asset Management (Pvt) Ltd, a unit trust management company licensed and regulated by the Securities & Exchange Commission of Sri Lanka and which constitutes of a team of experienced investments and operations professionals. 
• The Fund will receive a seed capital of LKR 100 million from Eagle Proprietary Investments Limited reflecting its confidence in the long term prospects of the Sri Lankan equity market and in the strategies adopted by the Fund Manager.