--Harry Thompson
Malaysian bank Permodalan Nasional Bhd is taking a MYR3 billion (USD917 million) structured product fund to Malaysian private banking clients and institutions. The fund invests in a mix of three asset classes, including the firm's own REITs, structured products and cash.
Cash will make up a minimum of 2% of the fund's investment, while structured products will form up to 80%, and REITs up to 50%. Nik Hazim Nik Mohamed, head of marketing in Kuala Lumpur, said PNB is buying the structured products from Deutsche Bank, using a mixture of interest rate and equity structures to form a portfolio of about seven. Nik Hazim said the structured products will be capital protected, will seek alpha and be market neutral.
The fund is actively managed and will rebalance each quarter. The closed-end fund has a maturity of five years, was launched May 12 and closes June 25. Nik Hazim added that the REITs were not publicly listed and that at first they would only be used by the fund. All the property is in Malaysia.
The payout on the fund will be each year rather than at maturity--a feature which has been popular on other PNB funds and which the firm has decided to expand to structured investment funds and is offered by competitors.
Nik Hazim added that in Malaysia, the majority of structured product funds only reference one structure. He said PNB's portfolio of structures approach is similarly intended to help guarantee regular returns, because in any one period an underperforming asset will be bolstered by others.