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European alts and Ucits managers boost offering for Chilean AFPs

European alts and Ucits managers boost offering for Chilean AFPs

A $66 billion Parisian alternatives fund house has been added to the Chilean AFPs' approved investment list as asset managers Degroof Petercam and Natixis Investment Management also expand their institutional offering.

Chile’s risk regulator, the Comisión Clasificadora de Riesgo (CCR), approved Ardian to offer private equity and infrastructure investments to local pension funds, the agency announced in its January 31 regulatory update.

Ardian became the fourth alternatives manager to get approval after a wide-ranging reform to boost AFP access to that asset class. The company didn't reply to requests for comment in time for publication.

In addition, the CCR added Degroof Petercam’s DPAM L Bonds Emerging Markets Sustainable fund and Natixis’ Seeyond Europe Minvariance to the list of mutual funds AFPs can invest in.

Both firms last listed funds for AFP investment back in 2016, making the recently-approved vehicles their latest addition to their offering in Chile.

Degroof Petercam head of international sales Tomás Murillo said the firm saw interest from local clients for its strategy in emerging market bonds, an asset class that received $3.6 billion in net flows from the AFPs in 2017.

‘The strategy, investing in local currency emerging markets government bonds, is unique in that it integrates the implementation of a sustainability screening model on a country level,’ Murillo said about the fund managed by Michael Vander Elst.  

Meanwhile, Natixis saw an opportunity to offer its low-volatility European equity fund, run by Nicolas Just, after the AFPs invested $4.8 billion into the broader asset class last year, according to a report by local firm HMC Capital. 

‘The idea isn’t to replace traditional funds, but rather combine what they have to offer a more efficient exposure with a higher Sharpe ratio because of the lower volatility, and in most cases without giving up much upside,’ said Martín Herbon, head of the Southern Cone for Natixis.

In its update, the CCR also added three Legg Mason funds and three Invesco funds to its approved list. Here's the rundown of new funds:

Fund name Manager
DPAM L - DPAM L Bonds Emerging Markets Sustainable Michael Vander Elst
Invesco Perpetual Pacific Fund William Lam, Stuart Parks, Tony Roberts
Invesco India Bond Fund Ken Hu
Invesco India Equity Fund Shekhar Sambhshivan
Legg Mason Brandywine Global Sovereign Credit Fund David F. HoffmanJack P. McIntyreStephen Smith
Legg Mason RARE Infrastructure Value Fund Shane HurstCharles HamiehRichard ElmslieNick Langley
Legg Mason Western Asset Global Core Plus Bond Fund Gordon Brown, Andrew Cormack
Natixis AM Funds - Seeyond Europe Minvariance Nicolas Just

The CCR also approved two ETFs, the Legg Mason Low Volatility High Dividend and the Lyxor MSCI EMU (DR) UCITS ETF.

In addition, the regulator also dropped five funds from its list:

  • Eastspring Investments - China Equity Fund
  • Morgan Stanley Investment Funds - Asian Equity Fund,
  • Principal Global Investors Funds - Finisterre EM Debt Fund 
  • NN (L) - Global Equity
  • GAM Multibond - Global Convert Bond

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