You are here: cherry > Press releases for May 2010 > Allianz Global Investors to launch UK’s first actively-managed Brazil OEIC

04 May 2010

First UK-domiciled, actively-managed Brazil OEIC, from the company that runs the only UK-domiciled BRIC fund To be managed by award-winning1 emerging markets manager Michael Konstantinov Allianz Global Investors announces that, subject to FSA approval, it intends to launch the Allianz RCM Brazil Fund in response to client demand2. This will be the first ever UK-authorised, actively-managed Brazil OEIC and will be run by the highly experienced RCM Global Emerging Markets team, which manages the £850m Allianz RCM BRIC Stars Fund. Led by team head Michael Konstantinov, the Fund will invest predominantly in Brazilian companies but will also retain the flexibility to invest outside of Brazil3. The Allianz RCM Brazil Fund will be accessible via a wide range of platforms Nick Smith, a managing director of Allianz Global Investors Europe, comments, “We are very excited to be able to offer investors such a compelling investment opportunity; Brazil is the best performing4 of the BRIC markets and in our view ticks all the boxes in terms of capturing the great investment themes arising as a result of the secular shift from developed to developing markets. Allianz Global Investors has significant experience and expertise in emerging markets and specifically Brazil, where the RCM team already manages close to £500m in Brazilian equities. “Together with Michael and his team we have thought very carefully about the design of this Fund and have responded to investor feedback. First, we decided on a Brazil focused fund rather than a more traditional Latin American fund because this is where we believe the vast majority of investment opportunities exist. Brazil already accounts for some 70% of equity markets in Latin America. “A typical Latin American fund has a significant exposure to the region’s second largest market – Mexico. Whilst Mexico does offer some investment opportunities, its economy is now a leveraged play on the US market. In this respect, it is not nearly as well placed as Brazil to capture the China growth story. However, the new Fund will have the flexibility to invest up to 30% in other Latin American equity markets. “Our second consideration, in terms of designing the Fund, was to ensure that it did not simply replicate the Brazilian index. Our aim will be to create a portfolio of high quality Brazilian companies with a particular focus on the exciting mid and small cap layer where some of the best growth opportunities exist. “As the UK’s leading BRIC manager, we also acknowledge that some discretionary managers prefer to make their own asset allocations between the BRIC countries, or want to be able to increase their exposure to certain countries. This Fund will satisfy that demand. With over 90 years of combined experience in the team, we are confident that this will become a flagship fund.” Michael Konstantinov, Chief Investment Officer of Global Emerging Markets at RCM, comments: “There has been much talk about the potential offered by Brazil and we believe the country is now poised to deliver on this. We are excited about the drivers Brazil has in place, including high growth, an era of lower inflation and interest rates, and a stable banking system. Also in contrast to other emerging markets, we expect returns in Brazil to be generated from both the stock market and expected currency appreciation. Indicators such as rising wages and employment levels, which are creating a very buoyant middle class, underpin the long term growth prospects for Brazil. These reasons along with a wealth of natural commodities leads us to believe that the Brazilian investment case is very compelling.” -Ends-

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