Cayman Island-based The Sri Lanka Fund to be wound up
ECONOMYNEXT – Ceylon Guardian Investment Trust and Ceylon Investment have announced they are considering winding up The Sri Lanka Fund, based in the Cayman Islands tax haven, whose aim was to attract foreign investments to the island.
The two firms hold 43.34 percent each of the dollar denominated fund, managed by Guardian Fund Management Limited.
A stock exchange filing said the decision was taken as “this investment vehicle is no longer an attractive structure.”
The Cayman Islands is considered a leading location for investment funds, estimated to house more than two-thirds of the world’s offshore hedge funds and nearly half of the industry’s estimated US$1.1 trillion of assets under management.
The stock exchange filing said The Sri Lanka Fund, an open-ended fund started in October 1993, was re-launched in August 2010 under the management of Guardian Fund Management Limited to attract foreign investors to the Colombo Stock Exchange.
The fund size was given as 2.23 million US dollars as at end-August 2018.
The top holdings were Cargills, Hatton National Bank, Ceylinco Insurance, Nations Trust Bank and Dialog Axiata.
About 43 percent of the fund was invested in the Colombo Stock Exchange’s banking, finance and insurance sector with 14.4 percent in conglomerates and 11 percent in the food, beverage and tobacco sectors.
As the fund is registered in Cayman Islands, which is a tax haven, capital gains and dividend income are not taxed.