In Malaysia, Mandate Investment is kind of alien to many of us. Public was not informed about it existence. Malaysians mainly exposed to Unit Trust investment for instance Amanah Saham Bumiputera. This is the most sought after an investment tool by Bumiputera particularly. However, in recent times this kind of investment has gaining a lot of traction.
What is Mandate Investment?
Mandate investment or also known as Private Mandate in Malaysia is a definition of ‘allocation of funds/capital to an Investment(Fund) Manager to be managed for a specific purpose or style. Also refers to the formal appointment to advise on or arrange a project financing'[1]. Typically it is offered to a High Net worth Investor. As the capital needed is quite huge as compared to any investment offered to retail investor.
How its market share looks like?
To date, the size of this kind of investment is fairly small if you are comparing to typical investment in Malaysia. For instance Unit Trust industry. Unit Trust market share [2] is currently at RM 520 billion. Meanwhile for mandate investment is merely RM 16 billion. In terms of sizing, mandate investment is currently standing at 3% to Unit Trust size. It shows that there is still room to grow for this kind of investment in Malaysia
How about its mechanism?
Unlike Unit Trust mechanism, Mandate investment is only catered for individual investor per Fund Manager. Not pooling their investment and put it into the fund like collective investment. The capital provided from the investor went directly to the Fund Manager custody. Fund Manager may place the money in stock brokering company before he is able to perform any investment. Investor may set his objective and giving his discretion to the Fund Manager.
What kind of securities involved in Mandate investment?
There are several type pf securities involved you may choose from. Namely:
- Shares
- Warrants
- Exchange Traded Fund
- Initial Public Offering
- Loan stock
- Unit Trust
This kind of securities which is hardly come by in other type of investment.
How about benefit of employing Mandate investment to other type of investment?
Among the benefit that you may enjoy under Mandate investment is Corporate Action such as follows:
- Share split
- Dividend
- Bonus Issues
- Right Issues
Same case as the above, this kind of Corporate Action is not available in other type of investment. You may get it here under Mandate investment. Therefore compounding your holding and ultimately increasing your return in the long term.
Do I have an access to the Fund Manager?
Yes. You may access to your own Fund Manager. Depending on the Investment Bank, Asset Management or any other type of institution. Among the thing that you may access is:
- Phone number
- Monthly Report
- Portal to monitor your investment
- Market updates.
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