HMC Capital has signed a subadvisory agreement with emerging and frontier markets specialist East Capital, marking the Chilean firm’s first equity mandate.
Under the deal, a team led by HMC’s head of equities Santiago Arias (pictured below) will provide investment research on Latin American equities for East Capital to support its global emerging market capabilities, according to a statement from the Swedish firm.
Initially, the firm will subadvise an ESG-focused, Luxembourg-domiciled Ucits, the East Capital Sustainable Emerging Markets.
Launched June 30, the fund is benchmarked against the MSCI Emerging Markets Index and focuses on sustainable business models and companies that deliver solutions to global issues.
The fund had $106.9 million in assets as of the end of November, with roughly 15% allocated to Latin American countries such as Brazil and Argentina, according to its latest fact sheet.
The new agreement expands the relationship between the two firms, which have been working together since 2010 when East Capital hired HMC to distribute its products to institutional clients in Latin America.
HMC Capital has $8 billion in assets under management and distribution, while East Capital runs $3.7 billion.
Commenting on the deal, Peter Elam Håkansson, chairman and CIO of East Capital, said the firm sees a local approach to investments as a key success factor in emerging markets.
‘By leveraging our longstanding relationship with HMC Capital and further expanding our cooperation to Latin American investment research, we now offer our clients local insight and expertise in all major emerging market regions,’ Elam Håkansson said.
Ricardo Morales, co-founder and chairman of HMC Capital, added: ‘HMC Capital and East Capital share the same approach and thinking towards the emerging markets universe and on-the-ground, in-depth research, integrating sustainability factors. We are therefore pleased to expand our longstanding relationship with East Capital with this exciting new phase of our cooperation.’
HMC has subadvisory agreements in segments such a real estate, though the firm declined to elaborate on who its partners are.