Tehran-based fund manager Turquoise Partners has launched a $5m domestic mutual fund to invest in the Tehran Stock Exchange (TSE). 

The fund was launched on 1 August, raising $500,000 by the close of the first day, with a subscription period that runs for ten days.   

“So far, we have raised about $500,000 excluding the seed investment, which is a good start,” says Ali Mashayekhi, head of investment research at Turquoise Partners.

“Since it is an open-ended fund, we can always take new funds later. We are aiming to reach $5m within a year or so and then launch a $50m fund, depending on market conditions.”

The fund is being sold through branches of a private bank and Turquoise is planning a targeted marketing campaign towards Iranian investors.

The Securities and Exchange Organisation (SEO) approved the launch of mutual funds in early 2008 so are still considered a relatively new product in the market, but they are growing at quite a rapid pace.

Historically, real estate has been the most popular investment in Iran, but the market’s slowdown is causing property developers to shift their focus to alternative investments. This is expected to provide a boost to the number of mutual funds.    

Today, there are close to 40 registered Iranian mutual funds managed by brokerage firms and investment banks, which range in size from between $1m to $50m.