e-fundresearch.com: Vladimir Tsuprov, CIO, TKB BNP Paribas Investment Partners, the lead investment advisor of the Parvest Equity Russia fund (ISINs of the key share classes: Classic shares - LU0823431720, I shares - LU0823432371). When did you take over the responsibility of managing this fund?
Vladimir Tsuprov: I have been working as a chief investment officer with responsibility for investment advisory of the fund since its inception in February 2007.
e-fundresearch.com: What is the current size of the fund?
Vladimir Tsuprov: The Parvest Equity Russia fund is the largest Russian equity fund in the world with AUM of EUR 1.5 billion as at the end of January 2014.
e-fundresearch.com: Do you also manage other funds or mandates?
Vladimir Tsuprov: Yes. I am the lead investment advisor/portfolio manager for 10 funds and segregated mandates within the product range of BNP Paribas Investment Partners and TKB BNP Paribas Investment Partners, including Russian pockets in BRIC and Eastern European equity strategies. I am also leading asset allocation for segregated mandates which follows a balanced strategy on the Russian market.
e-fundresearch.com: What is the total amount of assets you manage currently?
Vladimir Tsuprov: There is EUR 1.9 billion of AUM under my investment advisory and management and EUR 2.2 billion is in the segregated mandates where I am one of the key decision makers regarding asset allocation.
e-fundresearch.com: How long have you been in the business as a fund manager?
Vladimir Tsuprov: I have been in the asset management business for 16 years, including almost 9 years as a CIO of TKB BNP Paribas Investment Partners.
e-fundresearch.com: What are the main steps in your investment process and in which area is your competitive edge to add value to investors?
Vladimir Tsuprov: Active positions in the fund portfolio are made in line with our convictions and upside/downside to the fair price. Our conviction stems from the fact that we are based in Russia, know these companies well, regularly meet their management and we have monitored their business for a number of years. We meet with over 140 companies regularly and we feel that our research edge is mainly in mid and small cap companies. In low growth segments like energy we look for high and consistent dividend yields, meaning that proper assessment of capital expenditure discipline is crucial. In growth segments, such as retail chains or airline companies, we search for undervalued companies with high quality management and above sector average earnings growth prospects.
e-fundresearch.com: Which benchmark is most relevant and how should investors compare the fund vs. benchmarks or peer groups?
Vladimir Tsuprov: The Parvest Equity Russia fund benchmark is MSCI Russia 10/40 Net return index (EUR), which incorporates key limitations for UCITS IV compliant funds. Benchmarks don’t always offer positive returns therefore our key interest is in the extent of outperformance versus all market peers, on top of benchmark outperformance.
e-fundresearch.com: Which performance did you achieve for the fund YTD and over the past five calendar years in absolute terms and relative to relevant benchmark or other reference indices?
Vladimir Tsuprov: Despite overall decline of the Russian equity market in 2013 the fund rose by 3.8%, outperforming its benchmark by almost 10% (all figures net of fees in EUR terms for classic shares). This was mainly due to the fund positioning. The key focus was on attractively valued stocks with high dividend yields, which included significant active positions in the oil and gas sector and in mobile telecoms with dividend yields for some of the stocks exceeding 10%. The fund also avoided some of the worst performing sectors like utilities which suffered both from negative regulatory environment and worsening of corporate governance. Efficient stock-picking helped the fund to outperform its benchmark over two, three and five years and resulted in a consistent top quartile position compared to its peers over these periods.
e-fundresearch.com: Thank you!