ADIG Investment, a subsidiary of Commerzbank, has launched a Luxembourg-based Sicav to invest in the...
ADIG Investment, a subsidiary of Commerzbank, has launched a Luxembourg-based Sicav to invest in the high growth companies of Germany's Neuer Markt.
Arnd Thorn, managing director of ADIG Investment, said: "The German Neuer Markt has been a great success story for German investors. There have been a great many IPOs in the country recently and we believe the best way of allowing investors to tap into these was to launch an appropriate fund.
Germany's small companies, which are increasingly driving the country's economic growth, are selling shares at a record pace to finance their expansion.
In March, 14 German companies were set to go public and most of this action takes place on the Neuer Markt, which was set up in 1997.
Hans-Heinz Trobitz, head of new issues at DG Bank in Frankfurt, said: "We are seeing the same development that led to the success of the Nasdaq 20 years ago. Investors increasingly want to put their money in growth stocks.
Germany's DAX Index of 30 blue chip stocks returned 23.3% last year in dollar terms. The Neuer Markt returned 191.3.
Government subsidies, increased access to venture capital and a well-educated workforce have allowed industries such as biotechnology, telecommunications and software development to flourish in Germany over the past few years.
ADIG said a successful example of the country's hi-tech start-ups is Microsystems (SCMM), a maker of software and computer equipment that reads information from smart cards which contain computer chips and are used to conduct electronic commerce and security identification badges.
Thorn said: "Now is a good time to start investing in the Neuer Markt. Demand for its certificates or warrants has been high because of the growth potential of the listed companies. Most investors seek a better level of diversification than buying certificates directly can offer them, and this fund offers them that diversification.
"The emphasis is bottom-up and the portfolio management team looks closely at the individual management of the company that is the chief criterion for the Neuer Markt companies, many of which have very short track records.
The fund would aim for a reasonable level of diversification, holding over 20 companies at any one time. The top five holdings are MTV, Mobiscom, Consors, Kinowelt and Medium.
The ADIG Neuer Markt fund will be available to both foreign and domestic investors as a retail or institutional vehicle.
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