Reliance Capital sets sights on UK DFMs with new Indian-focused UCITS fund

Added 5th May 2016

Cohesion Investments has partnered with Indian asset manager Reliance Capital to launch the India Equities Portfolio Fund.

Reliance Capital sets sights on UK DFMs with new Indian-focused UCITS fund

Advised from India by Sunil Singhania, Reliance Capital Asset Management’s (RCAM) CIO, the new fund is the firm’s first UCITS vehicle for the UK market, but will follow the philosophy and process of its flagship domestic fund, the Reliance Growth Fund – which has a 20 year track record. It will consist of a portfolio of 40 to 50 stocks.

According to Cohesion the new fund is aimed at the UK discretionary investment market and follows the launch in December last year of the Cohesion India Best Ideas Fund, a non-UCITS SICAV that aimed to bring a distilled version of the Reliance offering to the ultra-high net worth family office sector.

Cohesion CEO, Spike Hughes said the firm has already seen a significant amount of interest in the fund from the wealth management community.

We raised $50m at launch, but we should double that within three months as we are in advanced talks with a number of discretionary firms to get the fund onto their buy lists.

“Every so often you do something where you know you are getting very strong traction, this is one of those times. I am convinced that in a few years everyone will allocate to India directly,” Hughes said, however, for now he remains frustrated by the tendency toward lumping the country in with other emerging markets.

“You need to look at India on its own. India is a structural growth story, but if you invest in it via broader emerging markets you are only really getting exposure to the mega caps, most of which are consumer staple, defensive stocks.”

Echoing that sentiment, Madhu Kela, RCAM’s chief investment strategist said: “the GDP of India is currently around $2 trn, we see that going to at least $5 trn to $6 trn over the next five to six years which will throw up significant opportunities and challenges . This means that if we look at what has happened in India over the past so many years at least double that excitement will happen over the next five to seven years.”

Process

While the fund will be advised by Singhania and will follow the same process as the Reliance Growth Fund, Hughes points out there will be some natural differences between the new fund that has currently got $50m and the existing fund which has a 20 year track record and has $1bn under management.

The fund has an AMC of 1.25 and with no performance fee 

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.

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