Fiducian offers something a bit different
India and IT are two solid investment opportunities perfectly positioned for future growth, says Indy Singh, managing director of Fiducian Investment Management.
Thursday, November 16th 2017, 12:40PM
Fiducian is a company that advisers in New Zealand won’t know too much about – what makes you different?
We’re a listed company in Australia and have been going for about 21 years. Investment is one of the components of our business. We also have our own I. T., so you can call us a Fintech, we have our own platform for administration, and we have our own financial planning business as well. We have almost AUS$6 billion under advice management and investment.
What’s your investment management style?
We call it “managing the manager”. We don’t believe that any individual is a hero or a genius. We pick out those managers who we think are the best for our clients, blend them together, and then tilt and alter our exposure to them so that we can get the best possible returns for our clients.
Your India Fund came second in the FundSource awards in the international category, didn’t it?
Yes, and our technology came first.
Why is India an attractive investment proposition?
India is starting from a low base – it’s an emerging market. It opened up its economy about 16 years after China, so it’s absolutely grassroots. The population is 1.3 billion, with a huge opportunity to develop. The companies there are focused on being India-centric. They’ve got a captive audience there in India. There aren’t enough goods to go around. The companies that are there are going to make an absolute bonanza once the country starts to grow and the GDP per capita rises above $1,700.
India elected a new government three years ago – is that making a huge difference?
The Indian government is quite capitalist – I’m not sure how that compares to the New Zealand government! It’s purely for growth and it wants investment-driven growth, not consumption-driven growth. There have been some sweeping reforms. They have got rid of about 1200 old laws, some of them British laws. They have now brought in lots of new things for the banking sector, they have brought in GST, they have demonetised the big currency to root out corruption. There have been huge reforms in the space of three years that you couldn’t believe.
Your I.T. fund came first in the awards, so you did very well.
You’ve got tax and death which are known certainties. The other certainty that we’re missing is technological improvement. That is the one constant in our lives. By about 2050, the modelling says that humanity will not contribute at all to GDP growth. It has to be productivity, which is purely technology. If we, as a developed country, want to maintain our standards of living, we have to adopt that new technology pretty quickly. What we like about technology is pure technology – the brain technologies. For example, biotechnology, robotics, artificial intelligence, and nanotechnology.
There’s huge growth in those sectors, isn’t there?
Oh, phenomenal. Particularly in biotechnology. In 2002, it used to cost $100 million to sequence a gene, or break down your genetic code. It now costs less than $1,000. Humans can now understand the very building blocks of any living being on earth, and now even alter those cells. Biotechnology is pretty big. We’ve invested in companies that are involved in gene therapy. You have diseases which are non-reversible, like cancer or cystic fibrosis or Alzheimer’s or dementia, and they are all genetic defects, because your body cells actually mutate. The new medication we’re getting is non-invasive, unlike chemotherapy, but it can change your genetic code to actually repair your body. It’s unbelievable what’s going to happen there.
What do you do with distribution in New Zealand?
We have a representative here in Heathcote Investment Partners, a guy called Clayton Coplestone. When we were coming here, Clayton told us to bring something special to New Zealand. He said, “We’ve got enough balanced funds and share funds and all that!” We felt that the two funds which had the highest probability of success would be the India Fund and the Technology Fund. With India, you don’t have to worry about it for 10 years, it’s non-reversible. With technology, it’s a lifetime, in perpetuity. It will continue to evolve and evolve until we can’t do without it. You can use your Apple phone or Android phone or whatever, or you can own the company that makes it!
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