Chatrapee Tantixalerm, sitting right, chairman of Ayudhya Fund Management’s executive board, and other company executives at the first press conference held after Bank of Ayudhya bought out JP Morgan’s stake in the firm.

Formerly known as Ayudhya JF Asset Management (AJF), the company renamed itself after the Bank of Ayudhya spent Bt10 million in August to acquire 575,000 shares from JP Morgan, doubling its stake from 38.33 per cent to 76.67 per cent.

Chatrapee Tantixalerm, chairman of AYF's executive board, said that under the company's new equity investment strategy, the equity department would no longer invest in companies in which it did not have in-depth analysis. Also, it will reduce significantly the authority of individual fund managers to make decisions and judgements.

"Previously, the management didn't carefully scrutinise the companies in which it invested. Back then, fund managers were freely left alone to manage their investment portfolios according to their own judgement," he said. "Now we've created an investment model and 90 per cent of our investment must follow this model. Fund managers will have around 10 per cent of total investment to manage according to their judgement."

AYF's head of fixed income investment, Arsa Indaravijaya, said the company's fixed-income investment strategy had also changed.

"Previously, the strategy was to invest in debt tools that offered high coupon [rates], although the risk was also high. Now, we focus only on highly secured bonds or highly rated debentures. Four issues that we scrutinise before buying debt tools are duration, yield curve, credit and risk," Arsa said.

In 2003, AYF was the country's third-biggest player, with Bt53.18 billion in assets under its management.

But after incurring Bt4 billion in redemptions and facing severely reduced liquidity, Bank of Ayudhya came to its rescue. Then it mistakenly invested in bills of exchange, leading to a big loss of customers.

Its assets under management spiralled. When the industry as a whole grew an eye-popping 60 per cent in 2005, AYF suffered a 13 per cent drop, slipping from Bt42.27 billion in assets under its management in 2004 to Bt37.73 billion at the end of last year.

AYF briefly crashed out of the top-10 list in July, when its assets under management bottomed out at Bt27.83 billion.

The climb back began in August, when AYF's assets under management rebounded to Bt29.87 billion, and then moved up to Bt31.3 billion last month.

Reungvit Nandhabhiwat, its former managing director, resigned late last year and was replaced by Chatrapee, who was formerly chief executive of Ayudhya Securities. A new head of equity investment, Nasu Chunsom, formerly of Aberdeen Asset Management, was brought in to strengthen the equity team and Arsa was brought in from Standard Chartered Bank (Thai)'s global investor sales to be head of fixed-income investments.

Chatrapee said that after the reorganisation, AYF recovered significantly. Its performance in equity funds is back in line with the market, while its fixed-income funds are among the best in the industry.

"From now on, in order to attract old and new customers, we have to count purely on our performance," he said. "Now that the management strategy is solid, we'll move on to the marketing plan."

Chatrapee said the Bank of Ayudhya was in talks with other AYF shareholders about purchasing the remaining shares in the company. The other shareholders are the banks' affiliated firms, including Ayudhya Securities Plc, Ayudhya Insurance Plc and Ayudhya Allianz CP Life.

Piyarat Setthasiriphaiboon

 The Nation