Tundra Sustainable Frontier Fund adds Ceylinco to portfolio
View(s):Tundra Sustainable Frontier Fund says that it bought shares in Sri Lanka’s insurance company Ceylinco valued at around five times of its annual profits making it very cheap in a frontier context.
“The company is well placed to continue to grow its bottom line by above 10 per cent per year going forward. Insurance premiums (general and life) as a percentage of GDP in Sri Lanka are approximately 1.5 per cent compared to about 5 per cent for Asia as a whole and 8-9 per cent in developed markets,” a Tundra communiqué said.
Ceylinco primarily underwrites general and life insurance products. “The company also has several subsidiaries in the education, power – generation and distribution of hydro power to the national grid – and financial sectors. For its CSR, the company runs social impact projects such as providing scholarships to disadvantaged children, blood donation drives and supporting relief measures like it did during the 2017 floods. Founded in 1939, Ceylinco is headquartered in Colombo,” the release said.
Tundra emphasises on Environmental Social and Governance (ESG) standards and Socially Responsible Investing (SRI). Since autumn 2016 all Tundra’s funds are screened for violations of international conventions (guidelines from UN Global Compact, OECD, and ILO) and they focus high on this aspect.
Tundra has an in-house ESG research team and external screening consultant. There’re two dedicated analysts working exclusively with ESG analysis where they communication with all portfolio companies and we focus on a systematic, scientific and thematic approach.
Avanceon Ltd, and IT company from Pakistan, was divested by Tundra during April due to financial considerations.