ECONOMYNEXT – Sri Lanka funds can make themselves more attractive to international investors by following ethical, social and environmental standards, a fund manager focussing on less well-known frontier markets said.
Mattias Martinsson, co-founder of Tundra Fonder, a Swedish based fund managing 400 million dollars of funds said investors who are concerned about Environmental Social and Governance (ESG) standards and Socially Responsible Investing (SRI) are growing at over 16.5 percent a year, over twice the 8 percent rate for other funds.
Martinsson told a forum in Colombo that firms that do not comply will find it increasingly harder to draw foreign investors in the future.
Tundra had two frontier market funds and two country funds focussing on Vietnam and Pakistan. Its Tundra Sustainable Frontier Fund was based on ESG standards, Jennie Ahrens, Head of ESG at Tundra Fund said.
Ahrens said an analysis found that many larger firms governance standards that were compliant but more work had to be done at others including in environment. They were willing to help firm’s improve practices and reach the standards.
Martinssen said Colombo Stock Exchange’s disclosure standards were already on the high side in the countries they focussed.
Tundra had identified Vietnam, Egypt, Pakistan, Sri Lank, Nigeria, Kenya, Bangladesh among countries to invest in.
Sri Lanka had literacy rate that was only behind Vietnam, and female school environment was high.
Sri Lanka’s tourism was growing and its strategic location could make it like Singapore.
However other analysts have said that Sri Lanka’s central bank which operates depreciating soft-peg on a philosophy of unsound money made it difficult to be a Singapore or Hong Kong.
Martinsson said in Pakistan where they had a country fund, such double digit growth was not seen. (Colombo/Mar05/2018)