BusinessTimes
FUND management company Kumpulan Sentiasa Cemerlang Sdn Bhd (KSC) is aiming for its "tea fund" to be fully subscribed by the end of this month.
The Alternative Investment Fund, which invests in companies that deal with Pu-Er tea, has so far attracted 10 high net worth individuals.
Pu-Er tea, like wine, is the only tea that tastes better as it ages, which means its value increases over time.
"We are looking for high net worth persons with net worth of RM2 million or companies that have net asset value of RM10 million to invest in this fund," said KSC director Choong Khuat Hock.
Speaking to reporters after the launch of the fund in Petaling Jaya on Saturday, he said that the fund, which requires a minimum investment of RM100,000, is open to both local and foreign investors.
The Alternative Investment Fund secured its approval from the Securities Commission last year. It is a closed-end fund with a three-year tenure and a fund size of RM50 million.
"Investor demand for this fund is very good. Today, 10 individuals have expressed their interest and we hope to close this fund by end of this month."
Choong said the size of the Pu-Er tea market in Malaysia is worth some RM100 million and growing, adding that the fund aims at a return of at least 50 per cent in three years.
KSC has appointed one of the country's leading trader in Pu-Er tea, Hai-O Enterprise Bhd, as its advisor. Hai-O also sells the tea, provides storage and issues put option to the fund.
Hai-O for decades now has become one of the largest importers of wines, herbal products, medicine and tea from China.
It recently signed a contract worth RM10 million to buy a warehouse in Klang, with a portion of the space used to store Pu-Er tea.
Hai-O managing director and founder, Tan Kai Hee said the last few years, the company has invested RM10 million in Pu-Er tea which it imports from China, store it for three years before reselling some of it to China with some being sold here and overseas.
Pu-Er tea originates from the Yunnan province in China but due to the sub-tropical climate, its fermentation process takes longer there.
Storing the tea in Malaysia promotes natural fermentation that is better and three times faster.
And depending on its type, origin, age and the brand, Pu-Er tea's price can jump up to 50 per cent per year.
Choong said two key benefits of the fund is that Hai-O has agreed to buy any unsold Pu-Er tea at cost at the end of three years if the fund is unable to sell the tea at higher prices.
"The upside is the bet that Pu-Er tea will continue to command rising demand due to the growing affluence of the Chinese for good healthy tea," he said.
KSC is an independent fund management company founded in 1996 and currently has RM500 million under management in Malaysia and international equities.
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