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Bci launches Ucits fund platform in LATAM expansion

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27 Mar, 2019

Chile's Bci Asset Management has launched its own Ucits fund platform in Luxembourg in a bid to broaden its reach beyond its home country.

The company launched its Bci Asset Management Sicav on March 1 and currently houses the group's Latin American Corporate Credit Fund, according to institutional sales head Matías Carvajal.

With the new platform, the company is looking to diversify its client base away from its exclusively Chilean institutional clientele.

'The goal is to be able to look for new investors, particularly to reach the Colombian and Peruvian institutional markets,' Carvajal (pictured right) said. 'We know it's going to be a long road, but this is part of the conviction that we have in Bci that this is a segment with a lot of potential.'

The group is also mainly focusing on pension funds, insurers and brokerage firms in both countries.

Bci had been offering the strategy in a Ucits format since December 2016, when it launched the Forum One Latin American Corporate Credit Investment Grade fund on Swiss firm Edmond de Rothschild's Sicav.

However, the company wanted more direct control over the platform and for the funds to bear its own brand to avoid confusion among its clients, according to Carvajal.

To ensure continuity for existing investors, the company merged the Forum One vehicle with the Bci AM Latam Corporate Fund on March 1, which allowed it to keep its track record.

As part of the plan, Bci is planning to onboard its funds onto the Allfunds Bank and Pershing platforms, the distribution chief said.

The Bci AM Latam Corporate Fund currently holds $90 million in assets, Carvajal said, adding that he thinks the fund can reach $200 million over the next year.

In addition, the company plans to continue expanding its Ucits offering by adding its Latin American equities strategy to the Sicav within the next 12 months, Bci head of institutional fixed income Gregorio Velasco (pictured left) said.

 

Credit outlook

Velasco, who serves as the portfolio manager of Bci's fixed income funds alongside Adolfo Hormazábal, said he expects Latin American credit to offer opportunities this year. He added that the asset class reaches at least $100 billion, creating entry opportunities for international investors.

'Both in investment grade and high yield, compared to developed markets, in Latin America we have an interesting spread that we don't think is 100% explained simply due to the risk implied in investing in a different region,' Velasco said.

'As more investors and more eyes look at these companies they'll understand that that there can be good business models, management and owners [in Latin America]… and this will logically generate better returns in the long term,' he added.