Alliance's Hong Kong funds race to £80m

TWO Hong Kong-based investment funds run by a subsidiary of Dundee-based Alliance Trust have raised almost £80 million in just three months.

Alliance Trust Asset Management's first two funds in the Far East - the Premier Alliance Trust Japan Equity Fund and the Premier Alliance Trust Asia- Pacific Equity Fund - have attracted substantial investments through UK-based independent financial advisers (IFAs), despite the company having no track record of managing open-ended investment companies (OEICs).

Alliance's head of Asia-Pacific, Anthony Muh, said: "This being a new venture and a name that's not associated with an open-ended structure, we are very happy with the progress so far, with the money coming through IFAs as well as some retail investors.

"And many fund-of-fund managers are reviewing us with a view to eventually putting money in, which is very positive."

Muh said the company was "probably slightly ahead" of where it thought it would be at this time.

"The fact that we have had three or four different fund-of-fund houses and IFAs putting in money very early on is a very positive sign," he said.

From a performance perspective, Muh said the Asian fund had done "spectacularly well" to date. Over three months, it has outperformed the benchmark - the FTSE All World Asia-Pacific ex-Japan Index - by 2.7 percentage points.

The Japan fund has not done as well.

"Although absolute performance is still positive, we have underperformed the index - the FTSE All World Japan Index - over the period," Muh said. "We are slightly more than 100 basis points behind."

For the future, Muh said the key was making sure the funds continued to build performance and that the Asian markets held up.

"Both of these factors will impact on how much money we are able to attract," he said. "Hopefully this year, the markets will return low double-digit numbers. As long as those returns are achieved and we are able to outperform the benchmarks, then the ongoing growth of subscriptions into these funds will continue."

Muh pointed out that work was continuing on new funds, but the final specification and timing was yet to be finalised. But a launch is likely to take place in the latter part of this year.

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