The Financial Services Authority (OJK) last year suspended the sales of several mutual fund products from Narada Asset Manajemen and Minna Padi Aset Manajemen after they were proven to have violated the authority’s regulations on mutual funds. The OJK even went as far as to liquidate six of Minna Padi Aset Manajemen’s products and suspend its selling licenses.

The Attorney General’s Office (AGO) also called as witnesses 11 investment managers that helped manage PT Asuransi Jiwasraya’s investments, which later turned sour and caused the company to suffer trillions of rupiah in losses.

The mutual fund scandal did not prevent the local unit of the London-based investment manager Ashmore Group Plc from carrying out its initial public offering (IPO). “We have been planning our IPO over the past two years,” Ashmore Asset Management Indonesia director Arief Cahyadi Wana told the press after the listing of the company’s shares at the Indonesia Stock Exchange (IDX) in Jakarta on Tuesday.

Listed under the ticker AMOR, Ashmore became the first investment management firm to be listed on the IDX. The company raised about Rp 211 billion (US$15 million) in fresh funds from the IPO and about 50 to 75 percent of the IPO proceeds will be used to finance the company’s plan to boost its digital presence, either by developing its own platform or in collaboration with e-commerce players, Arief said.

He further explained that a digital platform could be the key for the company to expand its market as it could help it to reach more people in the middle-to-lower economic segment that is often overlooked by the banking industry.

The Indonesian Central Securities Depository (KSEI) recorded a total of 1.77 million single investor identifications last year, an increase of 77.65 percent year-on-year (yoy). The sharp increase is partly due to the presence of online mutual fund platforms like Bareksa, Tanamduit and XDana, as well as e-commerce platforms like Bukalapak and Tokopedia that have branched out to sell mutual funds on its platforms.

Arief, meanwhile, said the other portion of the IPO proceeds would be used to finance its new mutual fund, which will be launched this year. Ashmore plans to issue around two to three new mutual funds this year.

With the new mutual fund products, he expressed hope the company’s asset under management (AUM) would grow by 20 to 25 percent yoy this year, he said. As of last December, the company’s AUM totaled Rp 30 trillion.

The company also hopes the online platforms would further increase its profits, which totaled Rp 86.5 billion as of June 2019, up 29.41 percent yoy.

The rise in profits was partly contributed by a 26.52 percent yoy increase in revenues to Rp 308.88 billion during the same period. About 43.31 percent of which came from management fees from the sales of its mutual fund products, Ashmore Dana Ekuitas Nusantara.

Aside from seeking fresh funding from the public, he said the IPO was also meant to strengthen its capital structure and, in turn, improve the public’s trust in the capital market. “This IPO is also our way to show that we have a strong capital structure, which is crucial for an investment management firm, and also to help increase the public’s trust in the capital market,” he said.

Although 2020 has only just begun, Ashmore Asset Management became the fifth company to list its share this year. IDX assessment director I Gede Nyoman Yetna said on Jan. 10 that at least 27 more companies would float their shares on the IDX this year.

“The companies also come from different sectors such as agriculture, consumer goods and finance, among others,” said Nyoman.

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