Ceylon Guardian and Acuity Partners venture into asset management business

Saturday, 21 May 2011 00:45 -     - {{hitsCtrl.values.hits}}

Ceylon Guardian Investment Trust PLC and Acuity Partners (Private) Limited yesterday announced their intention to form a joint venture company to explore growth opportunities in the asset management business.

The new venture will be equally owned by both entities and its Board will constitute equal representation from both partners.

The partnership aims to bring together Acuity’s and its partner banks access to a wide network of clientele through its international and local partnerships and Guardian’s core competence in fund management.

Acuity Partners is a joint venture between the Hatton National Bank and DFCC Bank, while Ceylon Guardian is a subsidiary of the Carsons Group through which the conglomerate undertakes its investment business.

Ceylon Guardian holds a listed investment portfolio of approximately Rs. 38 b including listed and private equity and manages outsourced client funds and a Sri Lanka country fund domiciled overseas.

Acuity Partners’ core activities include investment banking, corporate finance, stock broking and a primary dealership that deals with an extensive corporate, high networth and retail client base.

The new venture under incorporation, called Guardian Acuity Asset Management Limited, will commence business by launching a series of unit trusts catering to the local and international market, and will further continue to explore other opportunities to collaborate in the asset management business over time.

The unit trust funds will focus on equity and fixed income investments in the initial stages, and it is expected that Acuity will, in addition to its own network of clientele, also use the branch networks of its partner banks – Hatton National Bank and DFCC Vardhana Bank – to market the unit trusts.

The post-war economic development in Sri Lanka will see increasing per capita income and savings rates amongst the people which would translate to a demand for a wide variety of savings and investment options that meet the needs of the general public. Thus, it is likely that over time, savers would move away from traditional savings and fixed deposits schemes to more sophisticated savings products that combine the benefits of share portfolio investments and fixed income instruments.

Unit trust products lend themselves to be innovatively structured to create savings plans and mechanisms that match the risk and return profile of different investor categories with varying lifestyles and income needs at different times in their lives.

The demand for such savings products must, of course, naturally be combined with a better understanding of the risks of such investments and investors would therefore need to be fairly mature to be able to use such savings plans effectively. Guardian Acuity Asset Management will hope to offer the Sri Lankan investing public innovative savings schemes that cater to increasingly sophisticated investment needs.

The joint venture company presently under incorporation will in due course obtain approval for its unit trusts from the Securities and Exchange Commission of Sri Lanka and will thereafter launch the products formally to the market.

The Board of Directors of the proposed joint venture company would consist of Chandima Gunawardena (Chairman), Rajendra Theagarajah, Ray Abeywardena, Tyrone De Silva, Ruvini Fernando and Krishna Selvanathan. Niloo Jayatilake is proposed as the alternate for Chandima Gunawardena.