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Investec Asset Management is looking to take advantage of what it sees as an opportunity in emerging market debt to acquire new investments from Australian institutional investors, while Henry Review changes should also open up the dealer group market.
Investec Asset Management managing director Mark Samuelson said current feeder fund tax structures meant international funds were being disadvantaged by having to pay tax on capital gains, whereas local funds were only paying tax on income.
Under the current system the manager would need to set up a range of local funds to compete on an even footing, but changes arising from the Henry Review should level the playing field.
As a result, Investec was likely to make a lot more retail mutual funds available to retail investors through dealer groups and independent financial advisers, he said.
But as the manager looks to expand into Australia, it is clearly the big industry funds that are mostly on the radar, as well as government funds and corporates, Samuelson said.
Self-managed super funds present an attractive market but their proliferation makes them too difficult to target at this stage, he added.
Vivienne Taberer, Investec’s Capetown-based portfolio manager, said massive reform in emerging markets has established a good base for medium to long-term growth.
Emerging market debt also benefitted from high yields and low correlation to other classes such as US bonds, which makes it a great diversifier, she said. Investors were also well compensated for taking inflation and currency risks, she added.
