Affin Hwang AM Launches Private Equity Business – Bintang Capital Partners

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today that it has launched its private equity business, Bintang Capital Partners Berhad (“Bintang”). Bintang is a Private Equity Management Company registered with the Securities Commission Malaysia and is a subsidiary of Affin Hwang AM.

Bintang is the formalisation of Affin Hwang AM’s foray into the private equity market, which began in June 2017 with their maiden transaction, the buyout of Bitsmedia Pte Ltd, the company behind the world’s leading Muslim lifestyle app, Muslim Pro. This buyout was completed in conjunction with Bintang’s strategic Singaporean partner, CMIA Capital Advisors.

Teng Chee Wai, Managing Director of Affin Hwang AM, said, “The launch of Bintang marks the culmination of nearly two years of effort by the team to build the private equity business, an initiative led by Johan Rozali-Wathooth who joined Affin Hwang Asset Management as Deputy Managing Director in June 2016.”

“When we first came up with the idea of setting up a private equity business in 2015, I realised that the strong demand from both our institutional and high net-worth clients for more sophisticated investment solutions, including private equity, will only grow over time.

“We came to the conclusion that in order for us to successfully capture this opportunity, we had to move quickly to establish a private equity business with its own proprietary deal flow and a dedicated team,” Teng said.

Soon Poh Lean, Theresa Lim and Andrew Tan joined the Bintang investments team. Poh Lean joins Bintang as a Partner, whilst Theresa and Andrew join as Investment Director and Vice President respectively.

All three previously worked for RHB Investment Bank Berhad’s Mergers and Acquisitions department, where they were a core part of the regional M&A advisory team responsible for executing landmark M&A transactions on behalf of the bank’s corporate clients.

The Bintang team will be jointly led by Johan as Managing Partner, and Poh Lean as Partner.

Johan Rozali-Wathooth, Deputy Managing Director of Affin Hwang AM said, “We are delighted and excited to welcome Poh Lean, Theresa and Andrew to the Bintang team. They are a valuable addition to our team, and I have no doubt that their strong track record in running M&A transactions, combined with the relationships they have in the market, will greatly augment Bintang’s capabilities.”

“I feel that the team we have assembled brings together a strong combination of investment, strategic advisory & execution, technological / operational, and project management capabilities, which will allow us to bring a high level of holistic value-add to our investee companies. In turn, I believe this will translate into Bintang’s delivery of superior returns for our investors,” Johan said.

For more information about Bintang and its investment approach, please visit https://www.bintangcapitalpartners.com/

– End of Press Release –

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Affin Hwang AM Launches First Tranche of Enhanced Income Fund Series

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today the launch of the 18M Enhanced Income Fund 1 (“18M EIF1” or the “Fund”). The Fund is the first tranche of the Enhanced Income Fund Series which is a wholesale close-ended fixed income fund that aims to provide income return whilst maintaining capital preservation.

To achieve its investment objective, the Fund will invest a minimum of 90% of the Fund’s NAV in Defensive Assets including money market instruments or deposits, and a maximum of 10% of the Fund’s NAV in Active Assets such as options or structured warrants.

Structured as a fund-linked product, the Fund grants downside risk protection to investors through its backing of defensive assets, as well as offers greater upside participation by enhancing returns through a participation rate(1) that makes reference to a global fixed income strategy that provides broad-based income derived from multiple sources.

Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “As we enter the early-stages of a rising interest rate environment, there is an increased demand for fixed income products that provide higher returns to investors. The chase for yield continues in spite of a rising rate cycle, as investors seek income-generating opportunities to put their money to work and hunt for attractive yield levels. The Fund will fulfil this insatiable appetite for yield to enhance returns by allowing investors to participate in the fund’s structure, but without sacrificing capital preservation.”

“With over 90% of the Fund’s composition in defensive assets, capital preservation can be achieved from the interest income earned from this asset class. At the same time, investors are provided certainty of tenure to better manage their wealth and liquidity,” Ai Mei said.

On risk appetite of investors post-election Ai Mei adds, “Markets have been well behaved and largely stayed resilient since the election outcome. We have not seen any large redemptions across our retail or wholesale funds including those that are domestically-focused. We believe as the electorate matures, so have investors who are now taking a longer-term view of markets and are willing to overlook short-term volatility to seize opportunities.”

As illustration of the Fund’s performance, assume that the price of the underlying asset increases from 100 to 105 at the maturity date which is equivalent to a 5% gain during the period. Guided by an indicative participation rate of 2.0 times or 200%, the distribution payoff of the Fund at maturity doubles to 10%, as the 5% return of the underlying asset is increased proportionally by the participation rate.

On the flipside, if the price of the underlying asset suffers from a decrease in value from 100 to 98 at the maturity date, which is a loss of 2% during the period – the distribution payoff at maturity will be zero and is not compounded by the participation rate. Investors will recover their principal amount upon maturity (2), as the maximum loss that the Fund’s unitholders will incur is zero if the underlying asset’s performance over the period is negative.

The Fund is available to Sophisticated Investors who seek capital preservation, have a short-term investment horizon (i.e. 18 months) and are risk averse. The Fund is available for subscription for a period of not more than 45 days from the Commencement Date of the Fund, which is on 16 May 2018. The initial offer price is RM1.00 per unit, with a minimum initial investment amount of RM10,000.

Investors are advised to read and understand the contents of the Fund’s Product Highlights Sheet and Information Memorandum dated 16 May 2018 before investing. Investors who are keen to learn more about the Fund can visit http://affinhwangam.com/, and invest through any of Affin Hwang AM sales offices.

– End of Press Release –

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Affin Hwang AM Launches Global Target Return Fund – An Objective Based Solution amidst Volatility

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today the launch of the Affin Hwang World Series – Global Target Return Fund (“WS-GTF” or the “Fund”). The Fund is a wholesale feeder fund that seeks to achieve capital appreciation over the medium to long term period by investing in a collective investment scheme, namely Schroder International Selection Fund Global Target Return (“Target Fund”).

The Target Fund is a Luxembourg-domiciled fund managed by Schroder Investment Management (“Target Fund Manager”). To meet its investment objective, the Fund will invest a minimum of 80% of the Fund’s NAV into the Target Fund and a maximum of 20% of the Fund’s NAV into money market instruments, deposits and/or liquid assets.

Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “In an environment of heightened risks and increased volatility in markets, the role of an absolute return focused strategy has never been more relevant than it is now. As markets enter a new transition phase, the demand for a dynamic and flexible approach to asset allocation has become more punctuated.”

“The Fund will benefit clients by focusing on absolute returns with the intention of minimising both volatility and the risk of huge losses which are important to investors especially in this current market environment. With its unconstrained asset-allocation, investors will be able be to tap into a broad investment universe to reap the full benefits of diversification,” Ai Mei says.

The Target Fund is designed to deliver on a clearly defined target return-risk objective of USD 3 month LIBOR plus 5% p.a. returns(1), whilst minimising portfolio volatility by lowering the standard deviation of the Target Fund below 8%(2). By employing a flexible multi-asset allocation approach that is benchmark unconstrained, the Target Fund will invest in a broad range of asset classes and investment instruments from global equities, global investment grade bonds, currencies, and high yielding credit to other real estate, infrastructure and commodity-related securities.

Schroders is a highly regarded, award winning independent active manager with assets under management (AUM) totalling $US 604.7 billion as at 31 December 2017. Its team has pioneered an objective based investing approach to deliver on clear client outcomes, without relying on arbitrary benchmarks or a static asset allocation. With its distinct and flexible investment approach that is responsive to market conditions, its targeted return strategy has yielded annualised return of 7.78% p.a. since inception(3)

On outlook for markets and portfolio positioning, Stephen Kwa, Head of Product, Fixed Income and Multi-Asset Schroders Australia said, “While the world is not markedly different to what it was a few months ago, there are some things that have shifted. Firstly, the evidence is continuing to support the idea that core inflation is starting to rise in the US and that this is increasing the uncertainty around the future course of monetary policy. The latest pronouncements from the US around tariffs and trade wars have also elevated uncertainty around trade, retaliation, and by extension, growth.”

“Secondly, while economic conditions have been good (decent growth, improving profits, low inflation) and the US tax cuts a clear pro-cyclical boost to growth and profits, the exponential rise in equity prices through the December-January period was an over-exuberant response leaving both sentiment extreme and valuations extended.

“To be clear, we believe it’s premature to call the end to the bull market in equities just yet, as most bull markets end with recession and the risk of recession in any of the major economies at present is low. Structural equity valuations (especially for the US) are still demanding. Likewise the gap between interest rates (short and long) and the economy remain large – meaning the upside risk to yields remains (despite the moves we have seen already).  Therefore we see valuations as still too expensive although we are judiciously adding some risk, so far mainly in higher yielding credit at the expense of more vanilla fixed income, but for the reasons outlined are treading cautiously,” Stephen says.

The Fund is available to Sophisticated Investors who seek capital appreciation, have a medium to long term investment horizon and a high risk tolerance. The Base Currency of the Fund is in USD. The Fund is offered in eight (8) currency classes, namely USD Class, MYR-Hedged Class, SGD-Hedged Class, AUD-Hedged Class, GBP-Hedged Class, EUR-Hedged Class, RMB-Hedged Class and HKD-Hedged Class. The minimum investment amount is RM 10,000 for MYR and $5,000 for USD, SGD, AUD, GBP, EUR, RMB and HKD classes.

Investors are advised to read and understand the contents of the Fund’s Product Highlights Sheet and Information Memorandum dated 23 April 2018 before investing. Investors who are keen to learn more about the Fund can visit http://affinhwangam.com/, and invest through any of Affin Hwang AM sales offices, or all Citibank branches in Malaysia.

– End of Press Release –

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Joint Statement – Affin Hwang AM and AIIMAN Reaffirms Commitment to ESG Principles

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) together with its wholly-owned subsidiary AIIMAN Asset Management Sdn Bhd (“AIIMAN”) today reaffirmed their commitment in embracing environmental, social, governance (ESG) principles in their underlying investment process as signatories to the Malaysian Code for Institutional Investors (“the Code”).

Affin Hwang AM and AIIMAN became signatories to the Code a year ago on the 24 March 2017 and 22 March 2017 respectively. They join a list of 17 other local institutional investors & pension funds who have pledged to uphold the 6 principles stated in the Code including:-

  1. Disclosing Policies on Stewardship
  2. Monitoring Investee Companies
  3. Engaging Investee Companies
  4. Managing Conflicts of Interest
  5. Incorporating Sustainability Considerations
  6. Publishing a Voting Policy

Teng Chee Wai, Managing Director of Affin Hwang AM said, “We believe that institutional investors such as ourselves can play an important role in helping to champion the ESG (Environmental, Social and Governance) agenda and influence the behaviour of investee companies’ through an active and clear engagement strategy. We are here to serve our clients by investing in a sustainable manner so as to create long term value for our investors and society.”

The company recently appointed US-based Glass, Lewis & Co. (Glass Lewis), a leading independent provider of global governance services. Glass Lewis provides research reports with analysis and recommendation on every proxy vote and offers a vote management platform. The research will supplement the company’s existing investment research. In accordance with the Code, Affin Hwang AM will be disclosing its voting statistics from 2018.

The company also subscribed to MSCI ESG Research for its Asia coverage since last year.

On the alignment of ESG and Shariah principles, Akmal Hassan, Managing Director of AIIMAN says, “Our belief is that good governance ultimately leads to better financial performance and that it is not a trade-off when it comes to sustainability and performance. With increasing discussions on the commonality between Shariah and ESG principles, we expect there to be a wider offering of values based funds. In fact, Shariah-compliant investments are now widely considered a subset of the ESG universe. A new generation of investors have also become increasingly conscious about the wider ESG issues, whether its climate change, diversity or corporate transparency.”

– End of Press Release –

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Affin Hwang AM Stays Bullish on Asia – On Track to Meet RM50b AUA

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) believes that synchronised growth across emerging and developed markets will be positive for risk assets, as a positive earnings revision cycle continue to underpin markets. Asia remains one of the top-performers, with the MSCI Asia ex-Japan Index advancing 41.8% (USD terms), compared to the MSCI AC World Index which gained 21.6% YTD (Source: Bloomberg, as at 31 Dec’17).

In a media press briefing today, Teng Chee Wai, Managing Director of Affin Hwang AM said, “We expect the year 2018 to be a front-loaded market, with a risk-on script continuing into the 1H’18 and investors riding on the momentum to extract as much returns as possible in this period. Positive sentiment in markets and the recovery in crude oil prices will help fuel the momentum and cheer on the rally. Markets remain in a sweet-spot position with positive growth, and benign inflation which has kept policy tightening at bay and created the right conditions for risk-assets to perform well.”

“Volatility could pick-up in the 2H’18, as markets adjust to a reversal of a rate-cut cycle, with global central banks expected to gradually lift interest rates and embark on their balance-sheet unwinding. The gradual withdrawal of monetary stimulus would be a key focal point in markets, where there would be a need to now adapt to an environment of rising rates and lower liquidity in the system,” continued Teng.

On outlook for Asia, Teng adds, “We remain positive on Asia as a weaker US dollar environment and higher commodity prices across the board provide the uplift for Asian equities. The earnings revision cycle out of Asia continue to point towards strength, with earnings having been revised upwards by 5% on a 3-month rolling period. Valuations remain attractive from a forward P/E valuation standpoint, whereby Asia ex Japan still trades at a 18.7% discount compared to developed markets. In an era of low or negative yield rates, bond yields in Asia stands as an outlier providing positive yields for bond investors.”

In a company update briefing, Affin Hwang AM is also on track to meet its RM50 billion assets under administration (“AUA”) target by 2018. Charting one of the strongest growth trajectory in the company’s history, the company’s AUA grew by over RM 11 billion last year to reach RM47.3 billion as at Dec’17.

“This is an achievement that is both humbling and exciting for us, but never taken for granted. As an asset management player that puts integrity at the forefront of our core values, we will continue to manage our clients’ wealth responsibly through their hard-earned trust. We aim to sustain our growth momentum by building on our existing capabilities and knowledge-base to harness operational efficiencies within the company,” Teng says.

On business plans for 2018 Teng adds, “To stay at the forefront of the industry, we will continue to expand our investment offerings including alternative asset-classes such as private equity, real estate and low-cost solutions such as ETFs to serve our clients’ needs in an increasingly dynamic market environment. This would enhance our suite of offerings through proven solutions that are able to cater across the entire wealth spectrum as a full-fledged asset management player.”

– End of Press Release –

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Affin Hwang AM Launches Global Small-Cap Fund

KUALA LUMPUR – Affin Hwang Asset Management Berhad (“Affin Hwang AM” or “the Company”) announced today the launch of the Affin Hwang World Series – Global Quantum Fund (“WS-GQF” or the “Fund”), Malaysia’s first global small-cap fund. The Fund is a wholesale equity feeder fund that seeks to achieve capital appreciation over the medium to long-term period through investments in global smaller company equities.

The Fund feeds into the Standard Life Investments Global SICAV II – Global Smaller Companies Fund (“Target Fund”), a Luxembourg-domiciled fund managed by Standard Life Investments (“Target Fund Manager”). To meet its investment objective, the Fund will invest a minimum of 80% of the Fund’s NAV into the Target Fund and a maximum of 20% of the Fund’s NAV into money market instruments, fixed deposits and/or liquid assets.

Chan Ai Mei, Chief Marketing & Distribution Officer of Affin Hwang AM said, “With the return of growth globally, the investment case for allocating into small-caps has been emboldened, where the MSCI AC World Small Cap Index returned 110% in the past 10 years exceeding its large-cap peers represented by the MSCI AC Index which posted 66%” (1)

“This latest Fund will enhance our existing product suite and is a welcome addition to our World Series, where we seek to capitalise on our investment partners’ expertise globally. The Fund will fulfil a unique product gap in the market that will allow investors to tap into opportunities within the small-cap space which is largely overlooked being an under-researched asset-class, but has a larger investment universe of stocks to choose from,” Ai Mei adds.

On average, the sell-side community has 22 analysts covering large-caps and just 6 analysts assigned to small-caps (2). This information gap opens up opportunities to find compelling investment ideas, as well as exploit room for asset mispricing or inherent market inefficiencies.

Aberdeen Standard Investments is the brand of the merged investment businesses of Aberdeen Asset Management and Standard Life Investments. As a long-term active investor, the global asset manager has over 1,000 investment professionals, managing $764.3 billion* of assets worldwide as of 30 September 2017. Its Smaller Companies team uses a truly bottom-up approach and an investment process that leverages in-house fundamental analysis and a proprietary quantitative tool to identify compelling stock opportunities. The team seeks out higher quality companies which exhibit superior earnings momentum and growth for their global smaller companies strategy. With the distinct and highly disciplined investment approach, this strategy has yielded 94% in total returns over the past five years, which is equivalent to 14% in annualised return (3).

The Fund is available for Sophisticated Investors who seek capital appreciation through investments in global smaller company equities, have a long-term investment horizon and a high risk-tolerance. The Fund is available in five (5) currency classes, namely USD Class, MYR Class, SGD Class, AUD Class & GBP Class. The minimum investment amount is RM 10,000 for MYR class and $5,000 for USD, SGD, AUD and GBP classes.

Investors are advised to read and understand the contents of the Fund’s Product Highlights Sheet and Information Memorandum dated 18 January 2018 before investing. Visit http://www.affinhwangam.com for more information of the Fund.

– End of Press Release –

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