Russian equity specialist to pursue russian national pension mandate, as well as launch oil fund
Prosperity Capital Management, the specialist Russian equity firm, is taking advantage of its recent excellent performance to launch a slew of new initiatives.
The firm is set to create a registered local presence to get access to Russian high-net worth individuals, while at the same time pursuing the Russian government with the aim of tapping into the liberalising of the national pension fund scheme that is happening over the next few months. Lastly, Prosperity is launching an oil fund on the back of customer demand.
At the moment, very few of Prosperity's investors are Russian. By setting up a local company, the manager hopes to leverage its good results to break into the HNW, rouble-denominated market. As a second prong to the strategy, the company is keeping close to developments in the national pension fund. As part of the reform of the precarious pension system, the government will be setting up a defined contribution fund. Eventually (possibly within a year or so), citizens will be able to choose which funds they want to include as part of their investment. Prosperity aims to be an established retail name by then.
The most immediate change is the fund launch, a specialist Russian oil fund, investing in oil and gas equities. This has already been a high-performance sector and, according manager Mattias Westman, there are many further opportunities to be had.
Russian oil companies are some of the largest producers, or potential producers in the world and yet there is a huge disparity in the quality of management This is where the opportunity for upside surprise comes in.
Prosperity, comprising most- ly Scandinavian fund managers, divides the responsibility for sectors to different people in the company, with one director responsible for oil, another power companies, another telecoms and so on. The new fund will be run by Mattias Westman (oil expert) and Alexander Branis (power specialist).
Prosperity already has three funds under its 'Quest' umbrella ' a general fund, that aggressively moves to cash positions and generally takes a more absolute return stance, a Power fund, which has been one of the best performers of recent months in any sector, and the $5m Telecom fund, which has remained disappointingly small but does not lose the company money and so will be kept going, at least for the time being.
Along with the new oil fund, Prosperity will run seven funds, most of which have a minimum investment of $100,000 and are domiciled in the Cayman Islands. The exception is a small Finnish retail Ucits fund, which is co-branded with Seligson in Finland.
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