VFM Med Rim Fund sees birth of new process

By David Lindsay

Valletta Fund Management, jointly run by Rothschild Asset Management and Bank of Valletta, recently took its first steps in its internationalisation process by launching the Mediterranean Rim Fund.

Through the Fund - which will invest in and be retailed in the emerging markets of Tunisia, Morocco, Turkey and Egypt - VFM has broken ground both by the fact that it is the first fund launched by the company that invests in foreign markets and also in that it is the first fund that is being retailed overseas.

Rothschild's Robin Fuller told The Malta Financial & Business Times this week (see pages 10 and 11), "This is undoubtedly part of VFM's internationalisation process because we're finding intermediaries and we're investing in these intermediaries' own countries.

"This is precisely what VFM's main partners, Bank of Valletta and Rothschild always had in mind.

The Maltese market has potential but ultimately it is limited, so if a company such as VFM really wants to grow, it has to grow outside of the confines of Malta.

"Effectively, part of our internationalisation process is the fact that we now need to get intermediaries in other jurisdictions and this is precisely the product that would take us in that direction."

In fact, the Fund is already being sold in Tunisia and Egypt while another foreign intermediary is expected to be added in the near future.

However, VFM also has the internationalisation of its administrative services in the pipeline as Mr Fuller explains, "We are working on the administration side as well, which could be a lucrative business for us. Come rain or shine, the income generated from back office administration is always there.

VFM currently provides all the administrative services for third parties in Malta and its next step is to begin promoting a similar service to foreign parties.

However, Mr Fuller stresses the importance of listening to investors, "I think what we have to do through this fund is be there for our investors, any company that does not is doomed. So we have to listen to what they want.

"There are a number of potential ways forward [for VFM] but let's listen to them and to how they react to this particular initiative and try to meet their demands. There are number of ways that we can do that but we must be guided by their lead."