Eastspring and Commonwealth Court Indonesian Middle Class

Bank Commonwealth President Director Tony Costa (second from left) and Riki Frindos, president director of Eastspring Investments Indonesia (center) pose for photographer after an agreement signing ceremony on Wednesday, Jun. 11, 2013. (Photo courtesy of Eastspring Investments Indonesia)

Jakarta. Eastspring Investments Indonesia, one of the country’s largest fund managers, will add Bank Commonwealth, a local subsidiary of the Australian lender, to its distribution network as part of a strategy to tap the growing market of the middle class.

Eastspring Investments Indonesia and Bank Commonwealth signed a memorandum of understanding of their partnership on Wednesday. Eastspring Investments Indonesia manages Rp 44.6 trillion ($3.7 billion) in assets, including those of its sister company, Prudential Life Assurance, one of Indonesia’s largest life insurers.

“This is particularly important as we join forces with partners like the Commonwealth bank to assist Indonesia’s growing middle class,” said Riki Frindos, president director of Eastspring Investments Indonesia, in a statement on Wednesday.

Although Indonesia’s middle class is estimated at approximately 70 million people, only around 246,000 are registered as mutual funds investors. Nevertheless, Riki is confident that Commonwealth Indonesia’s 91 branches and offices will help the company to reach its target. Commonwealth will help distribute both Eastspring Investments Alpha Navigator, an open-ended equity fund, and Eastspring Investments IDR High Grade, an open-ended, fixed income fund.

In the first five months of the year, the actively managed Alpha Navigator has risen by more than 17 percent in comparison to the same period last year, above the 14.5 percent gain in the benchmark Jakarta Stock Index. Alpha Navigator assets under management were close to Rp 454 billion by May 30.

The IDR High Grade fund gained 5.5 percent in the first five months the year, which is below 6.3 percent after tax gain in the HSBC Bond Index benchmark. The IDR High Grade assets under management was around Rp 32 billion by the end of last month.

“These new products will help meet the increasing demand from our customers for mutual fund investment products to suit their financial goals,” said Commonwealth Indonesia president Tony Costa.

By Dion Bisara on 07:58 pm Jun 11, 2014