The King Irving Sura Pacific Alliance Fund is the only domestic Australian Fund that gives professional investors access to the Latin American emerging markets opportunity through the Pacific Alliance trade block.
King Irving Funds Management has appointed Sura Investment Management (Sura) as the manager of the Fund.
Sura Investment Management
Sura is a is a strong local presence in Latin America, with headquarters in Chile. Sura has over thirty years of expertise on the ground in the Pacific Alliance countries of Mexico, Colombia, Chile and Peru. (These countries comprise the MSCI Latin American Index, ex Brazil). This expertise, when combined with King Irving Funds Management’s knowledge of the Australian marketplace, provides a unique opportunity to explore a regional approach to emerging markets.
Sura employs a bottom up, fundamental process. This is overlaid with qualitative analysis and includes ESG for 20% of the total investment process.
The King Irving Sura Pacific Alliance Fund blends within a GEM or ACWI portfolio to provide growth and demonstrated downside protection in turbulent markets.
A Fund with a regional emerging market approach
We see value in seeking growth through emerging markets (EM), and specifically, in anticipated high growth regions.
The full benefit of investing in these regions is unlikely to be achieved by investing in a Global Emerging Market (GEM) strategy alone, as a market cap approach in EM tilts the portfolio construction outcome towards Asia (and China) and away from other emerging markets opportunities in the Index.
This generalist approach to an EM allocation is being challenged as the benefits of looking to other emerging markets such as Latin America, and in particular the Pacific Alliance, become apparent. A core plus tactical approach can provide a geo-balancing benefit by reducing portfolio risk through balancing out the GEM index bias towards Asian emerging markets.
The Pacific Alliance trade bloc, comprising Mexico, Colombia, Peru and Chile, as a region represents almost half of the GDP and trade for Latin America, with attractive fundamentals and a growing track record.
About the Fund
The Fund invests in a diversified Emerging Market portfolio of securities predominantly listed in the Pacific Alliance countries with the potential for capital growth and increased earnings.
To provide investors with high growth and income over the medium to long term by investing in listed or to be listed equities of companies located in the fast growing Pacific Alliance trade bloc of Mexico, Colombia, Peru and Chile.
The Fund aims to out perform the MSCI Latam Pacific Alliance Capped Index.
Selecting and appointing a Fund Manager
We select and appoint managers based on a variety of factors, including importantly, their likelihood of providing additional or new sources of growth and diversification to investor portfolios.
King Irving Funds Management seeks out active managers who are leaders in their markets. Naturally, these managers must have a strong local presence to provide them with an information edge, which we view as critical to the sustained generation of alpha.
We see benefit in seeking growth through Emerging Markets, and specifically in regions that are anticipated to provide high growth. The full benefit of investing in these regions is unlikely to be achieved by investing in a Global Emerging Market strategy alone.
Our investment manager due diligence processes includes the requirement of a proven and structured investment process implemented by a highly experienced investment team.
We also require managers with a strong focus on risk management. It is imperative to our risk control processes that our selected manager operates in an environment which provides investors with the comfort of transparent markets and stable regulatory systems.
Where appropriate, we use local experts in assisting us in selecting, and undertaking, manager due diligence. Afina International Advisors (Afina), a specialist adviser firm, assisted King Irving Funds Management in the search and selection of the manager for the Fund. Afina is an international financial and business advisory boutique focused on Latin America where it has extensive experience.
Ongoing management and oversight of the investment manager
The Fund’s portfolio is invested in accordance with the investment guidelines, performance objectives and risk management rules agreed with the Investment Manager and ourselves as set out in the Investment Management Agreement. The Investment Manager decides the investments it will make in accordance with these agreed guidelines.
Our compliance processes include the ongoing review of the Investment Manager and Fund portfolio to ensure that these guidelines, objectives and rules are met, using compliance reporting provided to us by our independent Custodian and Fund Administrator, State Street Australia Limited.