Heraymila Capital launches growth fund

Heraymila Capital (Pvt) Limited (HCL) announced the initial offer of its first unit trust fund, the Sri Lanka - Heraymila Capital Growth Fund on January 17, 2012.

The Sri-Lanka Heraymila Capital Growth Fund is an open ended, equity growth fund and will primarily invest in shares listed on the Colombo Stock Exchange.

The fund will provide both local and foreign investors an easy route to gain exposure to a diversified portfolio of Sri Lankan equities which are expected to benefit from the growth prospects of a post-war Sri Lanka. The fund is ideal for investors who do not have the time or expertise to select individual securities and have a longer term investment time horizon in mind (3 to 5 years).

The Sri-Lanka Heraymila Capital Growth Fund is being launched at an ideal time since the Sri Lankan share market is re-pricing itself, and select shares are once again becoming attractive long term “buys”. HCL as the Fund Manager will use in-depth fundamental research, long term focus and strong price discipline in selecting securities for the fund.

The initial offer period of the fund will be from January 17, 2012 to 4.30 p.m. on January 31, 2012, and units are priced at Rs 10 during this period. After the initial offer period investors could subscribe for units at the managers prevailing selling price. The Sri Lanka-Heraymila Capital Growth Fund will issue 500 million units during the initial offer. The minimum investment by an investor during the Initial Offer is Rs 10,000 with multiples of Rs 10,000 thereafter.

The Sri Lanka-Heraymila Capital Growth Fund will be actively managed by Heraymila Capital (Private) Limited, a company incorporated in Sri Lanka and licensed by the Securities and Exchange Commission of Sri Lanka to manage the above fund. The Fund Manager is a wholly-owned subsidiary of Heraymila Investments Limited (HIL), which is a company registered in the Dubai International Financial Centre (DIFC), and currently manages approximately US $ 300 million in assets. HIL is the holding company for the Al Mashal family’s offshore investments.

One of the larger family offices in Saudi Arabia, Al Mashal has substantial stakes in major regional companies and across international assets. Investors will benefit from HIL’s risk management processes, investment processes and vast experience in investing in other similar markets. Furthermore, HCL has employed portfolio managers with many years of experience in the Sri Lankan capital markets. The trustee and custodian of the fund will be Deutsche Bank, Colombo.

For investors who are not familiar with unit trusts, it is a form of collective investment structure where investors with similar investment objectives pool their money and give the responsibility of managing the monies to a professional fund manager.

The fund manager will invest the funds on behalf of the fund’s investors (unit holders). The type of securities within each unit trust fund’s portfolio is dependent on the fund’s investment objective or purpose.

For example a typical fixed income fund would invest in fixed income securities such as treasury bills & bonds, bank deposits and corporate paper with a view of generating regular income for the unit holders, whereas an equity unit trust fund such as the Sri Lanka-Heraymila Capital Growth Fund will invests in the stock market to primarily achieve a capital appreciation for its unit holders. The type of fund chosen by an investor should depend on factors such as his/her tolerance for risk, liquidity requirements, age & stage in life, lifestyle & income needs. In general, it is advisable to invest a larger portion of your investment portfolio in shares in your younger years and a majority of your portfolio in fixed income securities later in life or as you approach retirement.