Multi-boutique firm Natixis Investment Managers is bringing to Singapore investors a new thematic product that will focus on the “subscription” theme.
The firm has lodged an application with the Monetary Authority of Singapore to launch the Thematics Subscription Economy Fund to retail investors in the territory, according to the regulator’s records.
The fund is managed by its affiliate, Thematics Asset Management, which specialises in thematic investing. The firm was launched in early 2019 by ex-Pictet Asset Management fund managers who were also managing thematic products.
The new subscription fund, which incepted in December, invests primarily in companies that provide products or services on a subscription basis, according to its website. The offering has a global mandate and can invest up to 30% of its assets in emerging markets, according to the fund’s prospectus. It also integrates ESG principles in its portfolio construction process.
So far, no other fund manager has rolled out a product in Asia and Europe investing in the theme, according to FE Fundinfo data.
Thematics AM believes that the subscription theme is poised to see further growth, as more companies are adopting a subscription model rather than creating a “hit product that will only be sold once”.
“Businesses that have adopted subscription-based models also enjoy recurring revenues that are highly predictable. With a predictable revenue stream, expenses can be budgeted more precisely, and R&D usually becomes a huge beneficiary,” it said.
The subscription investment universe not only includes B2C players, such as those that provide mobile plan or video streaming/on-demand subscriptions to consumers, but also B2B companies. According to the fund’s factsheet, at least half of its assets is invested in B2B names.
The Thematics Subscription Economy Fund
Source: Fund factsheet, as of end-July 2020.
The fund, which is managed by senior portfolio manager Nolan Hoffmeyer and chief investment officer Karen Kharmandarian, holds 45 names and now has nearly $100m (€85.18m) in assets, according to the firm’s website.
The new offering adds to the suite of thematic products that the firm manages, which include the Water, AI & Robotics, Safety and Meta strategies. In total, the firm now manages around $1.3bn in assets.
Several other firms have rolled out thematic products in both Hong Kong and Singapore, though most of them are focused on the technology space.
Another firm that has started to roll out thematic products outside of the broader technology sector is Allianz Global Investors, which just received approval from the MAS to launch its Food Security Fund. It also introduced the pet and animal wellbeing theme in both Hong Kong and Singapore earlier this year.
The Thematics Subscription Economy Fund versus its benchmark index
Source: FE Fundinfo. Performance since the fund’s inception in US dollars.
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