Capitec Asset Management permitted to launch Tk200cr mutual fund

The securities regulator, on Monday, allowed asset manager Capitec Asset Management Limited to launch a closed-end mutual fund worth Tk200 crore.

The fund will be named Capitec Grameen Bank Growth Fund, and the Investment Corporation of Bangladesh will be the fund's trustee and custodian.

According to a press release by the Bangladesh Securities and Exchange Commission (BSEC), Grameen Bank will provide Tk100 crore, constituting half of the total fund size, as a sponsor of the fund. The remaining 50% will be raised through an initial public offering (IPO), where each unit will hold a face value of Tk10.

Earlier, Capitec Asset's Managing Director M Mahfuzur Rahman told The Business Standard that the fund would help increase money flow in the capital market.

"Over the past five years, our firm has established a reputation for maintaining a commendable track record in the asset management sector. This is why the sponsor and several other large institutional investors have placed their trust in Capitec," Rahman stated.

Currently overseeing more than Tk100 crore across three open-ended mutual funds, Capitec has delivered annualised returns ranging from 8.19% to 16.17% to its unit holders, as of December 2022.

"Since inception, none of our funds have gone a year without dividends. In the last two consecutive years, the existing funds yielded annual cash dividends of 10% to 15%," said Rahman.

Rahman further added that Capitec's decision to refrain from investing in private companies has bolstered investor confidence, as it reflects the asset manager's commitment to transparency.

The primary objective of the Capitec Grameen Bank Growth Fund is to generate risk-adjusted returns in the form of capital appreciation and dividend income. The fund aims to offer attractive dividends by investing in authorised instruments within both the capital and money markets, as outlined by Rahman.