Sri Lanka's Ceylon Asset Management has managed two mutual funds successfully, one in tourism and another in the financial sector attracting a large number of small retail investors and raising over Rs.230 million during the past six months despite a rather difficult period for investments due to the impact of global financial recession, officials said.
Dulindra Fernando, Managing Director of Ceylon Asset Management, the only index fund manager in Sri Lanka, told the Business Times that around 450 small investors have invested Rs.150 million in the tourism fund and 80 investors including local insurance companies and financial institutions along with some institutional investors contributed to raise Rs.80 million for the finance sector fund. Deutsche Bank is the trustee and custodian of these funds.
The tourism fund has already invested in the top 10 most liquid listed hotel and travel companies in the island, including Aitken Spence Hotels, Asian Hotels, Taj Lanka Hotels, Amaya Leisure, Light House Hotel ,the Fortress Resort, Hotel Eden and Hotel Intercontinental which are all listed firms owning and managing hotels and resorts across the island and overseas, he revealed.
The tourism fund is being managed as an open ended fund allowing investors to exit at any time and new investors to also enter. It will distribute tax free returns from profits from the 10 companies annually, Mr Fernando disclosed. He pointed out that Sri Lanka's tourism industry is now experiencing a boom and this fund covers around 55 % of the sector market capitalization and over 80% of the five star hotel rooms in the country.
He expressed the belief that the first ever tourism fund of Ceylon Asset Management will enable Sri Lankans to receive benefits from the tourism boom and to explore emerging opportunities and, thus the fund will be able to raise another Rs.450 million by the end of this year.
The financial sector fund has made investments in the top seven banks and three finance companies in the island contributing 80% of the market capitalization in the Colombo Stock Exchange, Mr Fernando revealed.