Despite the overall slowdown in the Russian economy, there are industries, which continue to flourish and among them the industry of mutual investment funds (PIF), which attracts more and more investors. Perhaps this is primarily due to the fact that the mutual funds (especially closed MIF) — particularly convenient form for the packaging investment. About the nuances of working with foundations and prospects of the industry “invest-foresight” talks with Olga Rykov, General Director UK “Veles Management” — the company specializing in managing Funds and endowment funds.
Combined Funds — growth drivers
— Tell, please, as today feels industry closed-end mutual funds in Russia? What does it represent? What is its scale?
— You need to understand that the funds are in a dependent position to the General situation on the market of the asset that is underlying in the Fund. For example, when we speak about closed-end unit investment Fund of real estate, so in relation to the General situation on the real estate market, and we cannot say that the development of the industry Funds will occur contrary to the asset that is underlying in the Fund.
But you say, in terms of assets. And speaking from the point of view of private investors, from the point of view of how to allocate the savings in a society where mutual funds compete with Bank deposits?
Our statistics show that in recent times we are seeing interest in closed-end investment Funds, especially in the beginning of 2019. This is confirmed by the overall statistics, which also says about the growth of assets of Funds in recent years. In 2017, closed-end funds was made to the assets of 362.9 billion rubles, in 2018 — at 142,4 billion in the first quarter of 2019 — almost 72 billion. Therefore we say that the Funds grow, their net inflow of assets, and the interest in them grows.
— What do you think explains the growth?
— I think this is due to the fact that more people are beginning to understand what a closed-end investment Funds, learn more about their capabilities; interest associated with this.
Personally, I don’t think it really explains something, because the Funds — tool is very old, he is known for a very long time.
— Yes, but available in the combined funds, appeared not so long ago. Early combined funds weren’t allowed. From the point of view of composition and structure of assets of the combined funds give more opportunities. The dynamics of the market, of which I said, has more to do with the combined funds. In addition, influenced by the fact that there has been a disclosure of the beneficiaries of Kicks.
— That is, the transparency of assets affect the behavior of investors?
— Of course. I’m not saying that investors are hiding out in mutual Funds. Those state agencies that need to know, of course, they will learn, but people don’t want someone could simply open the certificate of incorporation or of Rosreestr and immediately learn all about the owners of the asset.
— Still, the main factor in the growth of the market — the emergence of the combined funds?
— I think Yes. We have the money are concentrated mostly in combined funds, the second place — the real estate funds. What is the combined Fund? He has a wider investmentrate, which gives more mobility to funds, it can be real estate, and shares in Charter capital and funds in the financial market. Depending on the market situation you have more flexibility to manage these assets.
One investoday — one Fund
Today with the returns of mutual Funds?
— The latest statistics shows that it is 2.6–2.8% for the quarter. But this is an average, and actually everything is very individually, depending on the Fund, the investment strategy which the Fund is incorporated. The combined Fund may be venture strategy, which is justified in the long horizon.
— What investment strategy to you personally now seems optimal?
— We see that it is very important to identify trends that change the overall situation in the economy, in the country, I even will tell more: in the world. And it’s those trends that will operate for another 10-15 years, and will change our world.
— Do you mean primarily technological trends?
— Of course. In the first place, of course, is a global technological trends in such fields as medicine and health new materials and nanotechnology, biotechnology, information and communication technologies, etc. In these industries, we can still see the highs even more than Apple or Google.
— Then I have the following question. Venture capital or technological direct investment is a complex and very specific thing. Usually when an entrepreneur is engaged in such investment, he plunged into them, becoming a specialist in this matter. The management company of the mutual Fund they have a slightly different profile. Is there enough competence to Orient partially the mutual Fund as a venture capital Fund?
— We create trust when we have an investment idea, and under this idea we are looking for investors. And there are a few other situations: when investors are looking at us as a management company, then there is the investment Committee and the system of management of the Fund investment Committee. The idea was originally wrapped in a fond and lives in the Fund. But the primary idea, which is either from us or from investors. As for ideas — it could be anything; and Yes, to some extent, we need to become experts in the field, for which we undertake.
— What are some other ideas? It’s a development project or ETF securities? Or maybe entry into the capital start-up?
— The basis of the Fund can be down to the supply of real goods, when, for example, grain or oil products are purchased from manufacturers, transported to the deck of a ship, shipped to him and sold to importers. Until such ideas we have considered and studied the processes, how things happen. If we understand the process and its financial side, you can sell the idea to investors.
— And you, as a venture capital Fund, receive applications with such ideas?
— In different ways. Just sometimes there’s an idea or we hear it on the market. We understand that the idea may be of interest to our potential investors and we are ready in the form of a Fund to sell. Why a Fund? Simply because through the Fund to sell the. When there are funds of several shareholders, of a preferred form of collective investment. First, we estimate the yield, which may make some premarketing. Understand how interesting it is, find out the potential interest of investors and, depending on their interests and potential demand understand the Fund or do not do.
For whom are the Funds
— Who is the typical investor of your funds?
— Very different people. Generally, the Ftra — universal products. We can compete with Bank deposits. Can compete with venture capital funds. So I can’t say that we have a model investor. Cuit is so versatile that we can adapt to nearly everything. Can make a Fund that will be really interesting to investors who want an alternative to Bank deposits. Can make a Fund that will do venture capital and compete with the venture Fund. We can make the Fund real estate rental streams, to help business owners to structure their assets, it is more convenient to manage the business. It is difficult to say at the same time, who’s our main investor. On the one hand is a depositor of the Bank, on the other hand is the owner of a large business, a third party is a person willing to take risks and invest money in the venture.
— If the investor to the mutual Fund could be anyone, how to build a proper marketing of mutual Fund?
— We always selling face to face. Because we have all closed funds for qualified investors, while sales are mostly from 6 million rubles, and it usually involves talking one-on-one, eye-to-eye. We explain each idea.
— How do you notify that a new idea?
— Prozvanivatsya potential or current customer base. Say that there is such a idea, make premarketing, meet, explain, explain. It really is an individual selling.
The nuances of the industry
— Can the Fund be created under someone’s IPO?
You know, I never thought. Have not tried it.
— And among your ideas were associated with bloccano or cryptocurrency? Or ICO?
— We know how the regulator relates to this. So, no, we funds are not created.
— Since we touched on this topic, tell me what are for you the most important upcoming events in the field of regulation?
— We expect the abolition of the model rules of trust management — I hope that this will speed up the registration process of the Fund. Now check in the Bank of Russia — 25 working days. The important thing, in my opinion, that upon termination of the Fund will be able to partition the property in kind. This is an important change because it happens, to the shareholders of the Fund more profitable for the property to receive than to sell it upon termination of the Fund. Now it is impossible: the property has necessarily to sell. These changes will come into force in 2021. It is unclear how the apportionment of the property will happen; there are a number of issues, exactly how the assets will be divided. In my opinion, this may be the right of shareholders to decide how to do it. In any case, it increases market opportunities and the possibility of mutual funds.
— What is your forecast and your plans for the future?
— If we are talking about the Ftra, I look positively on the market. I think the more information about the funds, the better it will be in this industry. During crises, the Ftra is quite a good show. In combined funds is very convenient to shift between tools without breaking the composition and structure of assets, that is, it gives more possibilities. I think foundations are very good prospects in the near future for sure.
What prevents Russian endowments
— Well and last question. Tell me, what is now happening in Russia in the system of endowments?
Industry endowments is very young in Russia, she is only 12 years old. If we compare with Western countries, in which endowments exist for 300 years, we are at the very beginning of his career. The endowment is a tradition. Such funds are not “for today” and “tomorrow” is the effect that will appear in the future. Funds endowment funds are going to what the money is not allocated by the state. On the most complex projects. If we are talking about the field of medicine is something that is not sacrifice. We can raise money for a sick child. But there are other important things, like staff, which helps seriously ill and dying people. Many argue so: why do they need help? There is a state that they should pay a salary. But these people are very hard to find, not everyone will go for this kind of work, not everyone will be able to work in such conditions. They also have family, they also should be help and support. If we are talking about schools, then, say, an endowment of 30 million rubles at 10% per annum will allow the children at this school to engage in innovation, technology. But for that to happen, we must rebuild their world, their culture and start doing it today, and the result is we see not today and not tomorrow. Probably, our mentality is that we don’t understand. The result we need to see immediately, we have no faith, we often say:
“What it’s like to sacrifice? We give, and we have all stolen”.
I hope in 100 years, today even putting aside a small amount to these funds began to take shape, we will come to what appears the funds with considerable capital. But while this trend probably is not working exactly as we would like.
— Or, rather, it works and dot projects?
— How many of us endowments? I think, for our country they are few. Not more than 166. Some of them are not formed. It is also about saying something. For the formation of the endowment Fund of 3 million rubles. Not such a huge amount. May his profit will be 5-7% per annum. With 3 million rubles of 5-7% per annum is not too much to it to Fund some development. Therefore, the Fund needs to grow, and grow for a long time. These are really big projects, the long-term. As funds grow in the West? They create the grateful students who consider that what they have achieved in life was due to their University, and they donate the money in its endowment. We still have a culture yet. In this direction really need to work.
Interviewed By Konstantin Frumkin
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