Baltic Private Client Group Sets Up in Kazakhstan

Jason Corcoran

26 July 2007

The Baltic-based investor Parex Asset Management has set up an office in Kazakhstan following demand from private investors for its new Central Asian fund. The move is part of Parex's expansion across the Baltics, Russia and the CIS. Robert Idelson, president of Parex Asset Management, said the decision to set up in Kazakhstan stemmed from the appetite of mainly private investors for its recently launched Caspian Sea Equity fund. Speaking to WealthBriefing, Mr Idelson said: "It's been mostly private wealthy investors coming to us so far and not the institutions. Private investors, who made a lot of money in Russia, are now coming to us for our expertise in Kazakhstan. On the surface, it's not that different to Russia a decade ago but there are regional peculiarities." The fund, which is 73 per cent invested in Kazakhstan, 17 per cent in Georgia, 8 per cent in Azerbijan and 1.5 per cent in Kyrgyzstan, was set up five months ago and has aggregated €18.5 million from mainly private investors and some institutions. Mr Idelson added: "There are now great macro fundamentals in the region and private banks and asset managers are using us as a global asset allocator. Because of this, we decided we needed a presence in the region to better understand the dynamics than funds sat in London offices." Financials constitute almost 40 per cent of the fund followed by 22 per cent in metals and mining. Mr Idelson said he hoped to see some diversification away from these two sectors and more countries in the region open up to investment. The office in Kazakhstan's financial hub Almaty will conduct market research, provide clients with information about products and services, as well as investment opportunities in the Baltics and the CIS. Kazakhstan, which is the world's ninth-largest country, has recently seen a boom in interest from foreign funds while many of its leading energy companies and banks have listed successfully in London. Parex Asset Mananagment, the investment arm of the Parex group, currently operates in Lithuania, Russia and Ukraine and has over €1 billion in assets under management. It offers investment management and advisory services to domestic and international retail, corporate and institutional clients. It also manages a number of investment funds, as well as the second and third pillars pension plans.