Centrum Wealth to float $500-m new overseas fund

Centrum Capital plans to float a new $500-million overseas fund through its equal joint venture with Commonwealth Finance Corporation of Hong Kong.

Kunj B Bansal, Executive Director and CIO — Equity, at Centrum Wealth Management, the wealth management arm of Centrum Capital, told BusinessLine that the new open-ended fund would focus on mid-cap stocks.

“The road show for the fund would begin in 2017,” he said. This would be the joint venture’s second overseas fund. Unlike its first overseas fund, Bansal said, as the double tax treaty benefit would not be available, the new fund would not route its investments into Indian equities through Mauritius.

The first fund would also stop being routed through Mauritius next year.

The joint venture, Commonwealth Centrum Advisors (CCAL), will be the fund’s investment advisor, licensed by the Securities and Futures Commission in Hong Kong.

CCAL has also been advisor to the earlier open-ended $400-million India-centric mid-cap equity fund. The CCAL funds’ units are meant for global professional and institutional investors.

Bansal said the first mid-cap fund gave 35 per cent return in the past three years.

“Some 20 per cent of its portfolio is dedicated towards Indian banking and financial services companies. However, we did not invest in public sector banks, which have been struggling to manage the NPA burden,” he added.

In the first fund, 20 per cent of the investment focus has been on the FMCG sector, while auto, auto ancillaries and pharmaceuticals cornered 10 per cent each.

Centrum Wealth Management also looks after a ₹600-crore PMS for domestic investors, which has seen an AUM growth of 20 per cent in the past four years.