Asset managers eye setting up boutique funds in Bulgaria
Asset managing companies operating on the Bulgarian market will seek
permission to set up boutique mutual funds targeted at a limited number
of deep-pocketed investors, the online English edition of the Dnevnik
daily informs. The investment will be parked in riskier assets such as
derivatives with the aim to achieve higher yield but also greater
danger of loss. Legislative amendments proposed by the Bulgarian
Association of Asset Management Companies (BAAMC) obtained by Dnevnik
see boutique schemes attracting investment from no more than 100
people. Eligible investors must have BGN 1 million in assets. Despite
the crisis, industry representatives say there are enough wealthy
people in Bulgaria to meet the requirements for joining such schemes.
Asset managers also propose that the funds should not be traded on the
stock market in Bulgaria or any other EU country. Boutique schemes will
be also overseen by the Financial Supervision Commission (FSC) but
control should be much looser and they will bear much higher risk.
Furthermore, they will not be required to issue prospectuses approved
by the regulator and post data at much less frequent intervals.
Boutique funds will be allowed to borrow more cash for specified
purposes and invest in derivatives such as options, futures, forwards,
swaps and commodities to hedge risk. Conventional contractual funds and
investment companies in Bulgaria can only invest in a limited number o
assets.
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