Milltrust International, which launched an emerging markets hedge fund platform last year, has added its first three funds. They provide access to Brazil, Latin America and Greater China equities.

Milltrust International Group has added the first three funds to its emerging markets platform. Further additions are planned for later in the year and early 2013.

The Emerging Markets Managed Account (Emma) platform was launched a year ago by Simon Hopkins, founder of Fortune Asset Management Group, which was sold to Close Brothers in 2006.

State Street provides the infrastructure for the platform.

The first three managers sourced by Milltrust offer access to Brazil, Latin America and Greater China.

The Milltrust Brazil Fund is managed by BTG Pactual, one of the largest independent investment banks in the emerging markets, according to Eric Anderson, a managing partner at Milltrust. The fund will run?pari passu?to the BTG Pactual Absoluto Fund, a long-biased Brazilian equity fund, which has been running since 2007 with an annualised return of 14.8%.

The Milltrust Latin America Fund references the Itau Latin America Equity Fund, which takes a fundamental approach to equity investing. Portfolio manager Scott Piper was hired from Morgan Stanley earlier this year and has two decades of experience investing in the market. The Milltrust fund will be more concentrated and take higher conviction positions than the reference fund.

The Milltrust Value Partners Greater China Fund is based on the Value Partners Classic Fund, a long-biased equity fund. Since launch in 1993 the annualised return of the fund, run by the $7.2 billion investment company Value Partners, is 18.64%. The Milltrust fund will run virtually?pari passu?to the reference fund, with a slightly greater focus on mid to large-cap stocks.

Although the original intention of the platform was to promote smaller, less known managers, Anderson says Milltrust ended up partnering with larger institutions because of the quality of their investment teams.

The emphasis on equity strategies in emerging markets reflects a shift in institutional investor interest. “Where traditionally a lot of pension funds and institutions have invested in the fixed income markets, a lot of them are now diversifying into equity. There has been a build-out of the equity teams in these regions and in south-east Asia they are building trading links to link the markets,” says Anderson.

“We feel it’s a liquid and relevant way to capture the exposure to the market. We will look at fixed income but at the moment the exposures we have found to be better suited are in the equity market.”

The three funds are all Irish-domiciled Ucits funds. The platform also has the ability to offer US onshore and offshore funds as well as segregated accounts.

The platform is designed to help investors build a global emerging markets portfolio, explains Anderson. “We are looking for managers that can pick the better companies in each region.” He believes existing ETFs and indexes for these markets are too exposed to volatility from developed western economies.

Milltrust is planning to add an Indian and an south-east Asian fund to the platform in September.

Sourcing an India manager was particularly tricky, admits Anderson. “A lot of the better Indian names are trading Indian assets in India and they haven’t traded any offshore assets yet.”

Indian hedge fund UTI Asset Management will join the platform with the reference fund UTI India Fund ? 1986 Shares. “We like their strategy. It is a blend of large cap and mid cap. The large cap exposure gives them a good beta hedge so they don’t miss out on a market rally but they are also looking at mid cap, at off-benchmark stocks,” says Anderson.

“India has one of the worst macro pictures at the moment: inflation is high, there is low growth, and there is corruption. But that doesn’t means there aren’t opportunities on the micro level. There are companies that are making money off the key themes in India,” he adds.

Some of the themes UTI pursues include domestic consumption and a rise in disposable income among the rural population, he explains.

Milltrust is also planning a pan-Africa fund for the first quarter next year and to add funds investing in Eastern Europe to the platform next year.

The platform has secured a $100 million investment from a South African pension fund.

In additional Milltrust has opened a Montreal office to service the North American market with pension funds, other institutional investors and consultants in the region showing interest, according to Anderson.

There are also currently institutions in Korea and China doing due diligence on the platform, says Anderson. As all the funds on the platform at the moment are Ucits-compliant, they are attracting interest from European investors.