LONDON (Reuters) - Atlantis Investment Management, the independent Asia specialist, is reshaping its Asia ex-Japan offering with the medium-term aim of building a more diversified business to better withstand market turbulence.
Specialist emerging markets managers suffered massive redemptions last year when investors dumped higher-risk assets and fled for the safety of U.S. treasuries.
Atlantis — which has $2.6 billion (1.6 billion pounds) in assets — has taken the decision to close one sub-scale single-country fund, restructure another, and plans to launch more broad-based products when market conditions allow.
“We want more of a balanced business base,” said Marketing Director James Alexander. Towards that goal, two fund ideas are on the back burner awaiting improved market conditions.
One of these would invest in the ASEAN countries — the Association of South-East Asian Nations — which includes larger markets Singapore, Thailand and Malaysia, as well as frontier markets such as Vietnam, Cambodia and Laos.
The other would be a broadly-based Asian fund, giving Atlantis more stability during market turbulence than its existing niche Asian Recovery Fund. This would compete head on with some of the better-known names in Asian investment.
“In time this could be a much larger product,” said Alexander. “We want a more diversified Asia ex-Japan business.”
Single country funds had a rough ride during the post-Lehman scramble for the door. Atlantis had to suspend dealing in its China Fortune Fund on October 7 2008, citing market volatility, redemptions and a lack of liquidity.
This has been restructured and reopened in April 2009 as the Dublin-based New China Fortune Fund and the Cayman-based Riverwood, which contains the more illiquid portion of the old portfolio and has a longer lock-up period.
Atlantis also closed the sub-scale Korean Opportunities Fund in March 2009 after assets under management fell into the low single digits, and has brought the Korean Smaller Companies Fund under the auspices of the Asia ex-Japan team.
“Trying to offer the two Korea funds was not working for us,” Alexander told Reuters. “We also felt it was important that the assets in Korea should work more closely with the Asia ex-Japan team as there is a lot of cross-over.”
Atlantis recruited Joseph Wat as head of the Asia ex-Japan team in July 2008 to open a Singapore office as a base from which to develop new products. He said he is looking to add one or two analysts or portfolio managers to the team this year.
In April 2009 Wat took over the management of the Asian Recovery Fund from Tony Jordan, a founding partner of Atlantis who has left the company. Wat said redemptions have been halted, but western investors remain cautious about emerging markets.
Editing by Rupert Winchester