Vietnam
11 December 2013
AST discovers what it takes to service a fund in Vietnam
Image: Shutterstock
In October of this year, Ho Chi Minh City was home to the launch of the first UCITS-compliant, actively managed Vietnam equity fund. The fund is managed by Dragon Capital—one of the largest fund managers in the IndoChina market with around $1 billion in assets under management.
Launched in September, it is the first actively managed UCITS-compliant equity fund that opens Vietnam’s blue-chip companies to global investment.
Dominic Scriven, Dragon Capital’s CEO, said at the time that it was an exciting period for the fast growing IndoChina region, and attributed its custodian BNP Paribas Securities Services as vital to the fund’s aggressive regional and international expansion.
Following a competitive tender, BNP Paribas Securities Services designed and rolled-out a tailor-made fund solution including global custody, fund accounting, transfer agency and trustee services, for Dragon Capital’s Vietnam fund.
The investment objective of the Dublin-domiciled fund is to seek medium- to long-term capital appreciation of its assets.
Mostapha Tahiri, head of BNP Paribas Securities Services Singapore, who is also the bank’s Asia head of asset and fund services, says that the bank’s solution for the fund is a “genuine” Asian model.
“We are supporting this Asian based asset manager with teams located in the region, and have designed a model for which client and distributors’ support are all performed in Asia. Asset managers work with the BNP Paribas team in a local time zone and their investors are supported by a team who speaks their language.”
Tahiri adds that the bank understands the diversity of Asia in terms of cultural, language, regulatory requirements as well as types of investors. As such, he claims, BNP Paribas is not replicating a foreign, ‘one size fits all’ model to Asia but building a genuine Asian model. This, he says, “is the only model which can help asset managers successfully navigate the complex Asian environment”.
But there are other international players on the market that would disagree. In June of this year, Deutsche Bank became custodian, supervisory bank and fund administrator for Vietfund Management’s Vietnam Bond Fund (VFMVFB), one of Vietnam’s first open-ended funds.
The bank is also providing transfer agency services to the bond fund, which includes data processing of all applications subscriptions, redemptions and switches, as well as reporting services for VFMVFB.
Initially established as a joint-venture company between a British investment firm and Sacombank—a large commercial bank in Vietnam—Vietfund Management is now a leading fund management company in Vietnam with approximately $200 million AUM.
Mrugank Paranjape, Asia Pacific head of trust and securities services and cash management for financial institutions in the global transaction banking business at Deutsche Bank, said at the time of the mandate win that it represented an important part of the bank’s long-term growth strategy in the ASEAN region.
The bank’s Ho Chi Minh City branch also celebrated an award a merit of excellence for its cooperation with Vietnam’s State Securities Commission, in part for its contributions towards the establishment of accounting guidelines for Vietnam’s open-ended funds.
The small point
The differences behind providing a mandate for Dragon Capital’s fund, says Tahiri, come with the fact that the asset manager is based in Asia, with unique investment strategies. “This includes the ability to properly valuate the financial instruments used, provide the NAV early enough for investors and intermediaries in Asia to meet the fund cut-off, having an appropriate perspective in registering investors from different legal jurisdictions, and comprehensive and timely reporting to the asset manager. It is also critical to be able to communicate and address any issues with the asset manager and their investors in a local time zone.”
Samba Sivan, South Asia head of direct securities services at Deutsche Bank, says that there is one unique characteric to consider when servicing a Vietnamese fund. “In Vietnam, the custodian also acts as a supervisory bank, which has a fiduciary responsibility towards the investors. Hence, strong knowledge of accounting and expertise in local regulations, as well as international practices, are necessary.”
The two banks have different plans for their footprint in the region—though both are centred around growth. Tahiri says that BNP Paribas’s strength in UCITS and other schemes will be helpful in supporting Asian asset managers growing internationally.
“Asian asset managers are able to expand their footprint out of their home country by leveraging on our advisory approach to global funds including UCITS, SIF and QIF expertise in Europe, locally Singapore and Hong Kong and to our RQFII fund model,” he says. “We are able to support an asset manager’s decision making process from business definition to fund distribution through analysis on market trends and dynamics, distribution practices, regulatory framework and through our proven operational model deployed in the target markets.
Sivan, meanwhile, says that Deutsche Bank’s expansion plans centre around investment in staff. “Deutsche Bank has been very active and successful in the Vietnamese fund services market since 2007, especially with the open-ended funds since 2011, and the bank also played a key role in the development of the local fund accounting guidelines. We are committed to growing our direct securities services business in South Asia. Our strategy is to continue investing in our people and technology, while focusing on providing customised solutions tailored to our clients’ needs in their home markets and beyond.”
Launched in September, it is the first actively managed UCITS-compliant equity fund that opens Vietnam’s blue-chip companies to global investment.
Dominic Scriven, Dragon Capital’s CEO, said at the time that it was an exciting period for the fast growing IndoChina region, and attributed its custodian BNP Paribas Securities Services as vital to the fund’s aggressive regional and international expansion.
Following a competitive tender, BNP Paribas Securities Services designed and rolled-out a tailor-made fund solution including global custody, fund accounting, transfer agency and trustee services, for Dragon Capital’s Vietnam fund.
The investment objective of the Dublin-domiciled fund is to seek medium- to long-term capital appreciation of its assets.
Mostapha Tahiri, head of BNP Paribas Securities Services Singapore, who is also the bank’s Asia head of asset and fund services, says that the bank’s solution for the fund is a “genuine” Asian model.
“We are supporting this Asian based asset manager with teams located in the region, and have designed a model for which client and distributors’ support are all performed in Asia. Asset managers work with the BNP Paribas team in a local time zone and their investors are supported by a team who speaks their language.”
Tahiri adds that the bank understands the diversity of Asia in terms of cultural, language, regulatory requirements as well as types of investors. As such, he claims, BNP Paribas is not replicating a foreign, ‘one size fits all’ model to Asia but building a genuine Asian model. This, he says, “is the only model which can help asset managers successfully navigate the complex Asian environment”.
But there are other international players on the market that would disagree. In June of this year, Deutsche Bank became custodian, supervisory bank and fund administrator for Vietfund Management’s Vietnam Bond Fund (VFMVFB), one of Vietnam’s first open-ended funds.
The bank is also providing transfer agency services to the bond fund, which includes data processing of all applications subscriptions, redemptions and switches, as well as reporting services for VFMVFB.
Initially established as a joint-venture company between a British investment firm and Sacombank—a large commercial bank in Vietnam—Vietfund Management is now a leading fund management company in Vietnam with approximately $200 million AUM.
Mrugank Paranjape, Asia Pacific head of trust and securities services and cash management for financial institutions in the global transaction banking business at Deutsche Bank, said at the time of the mandate win that it represented an important part of the bank’s long-term growth strategy in the ASEAN region.
The bank’s Ho Chi Minh City branch also celebrated an award a merit of excellence for its cooperation with Vietnam’s State Securities Commission, in part for its contributions towards the establishment of accounting guidelines for Vietnam’s open-ended funds.
The small point
The differences behind providing a mandate for Dragon Capital’s fund, says Tahiri, come with the fact that the asset manager is based in Asia, with unique investment strategies. “This includes the ability to properly valuate the financial instruments used, provide the NAV early enough for investors and intermediaries in Asia to meet the fund cut-off, having an appropriate perspective in registering investors from different legal jurisdictions, and comprehensive and timely reporting to the asset manager. It is also critical to be able to communicate and address any issues with the asset manager and their investors in a local time zone.”
Samba Sivan, South Asia head of direct securities services at Deutsche Bank, says that there is one unique characteric to consider when servicing a Vietnamese fund. “In Vietnam, the custodian also acts as a supervisory bank, which has a fiduciary responsibility towards the investors. Hence, strong knowledge of accounting and expertise in local regulations, as well as international practices, are necessary.”
The two banks have different plans for their footprint in the region—though both are centred around growth. Tahiri says that BNP Paribas’s strength in UCITS and other schemes will be helpful in supporting Asian asset managers growing internationally.
“Asian asset managers are able to expand their footprint out of their home country by leveraging on our advisory approach to global funds including UCITS, SIF and QIF expertise in Europe, locally Singapore and Hong Kong and to our RQFII fund model,” he says. “We are able to support an asset manager’s decision making process from business definition to fund distribution through analysis on market trends and dynamics, distribution practices, regulatory framework and through our proven operational model deployed in the target markets.
Sivan, meanwhile, says that Deutsche Bank’s expansion plans centre around investment in staff. “Deutsche Bank has been very active and successful in the Vietnamese fund services market since 2007, especially with the open-ended funds since 2011, and the bank also played a key role in the development of the local fund accounting guidelines. We are committed to growing our direct securities services business in South Asia. Our strategy is to continue investing in our people and technology, while focusing on providing customised solutions tailored to our clients’ needs in their home markets and beyond.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
