Tehran-based fund manager Turquoise Partners is planning to launch a $5m domestic mutual fund on the Tehran Stock Exchange (TSE) by mid-July.

We’ve obtained a licence from Iran’s Securities and Exchange Organisation to launch a fund

Ali Mashayekhi, Turquoise Partners

“We’ve obtained a license from Iran’s Securities and Exchange Organisation (SEO) to launch a $5m domestic mutual fund,” says Ali Mashayekhi, head of investment research at Turquoise Partners.  

“This is just to test the market appetite, but we aim to increase this to $50m within the next year.”

The SEO, which is Iran’s financial regulator, provides licenses for two fund types – small funds are classified as $5m or below, while large funds can be anything up to $50m in size.

“Once the fund is in place, we are going to start marketing it quite aggressively to Iranian investors,” says Mashayekhi.

The SEO approved the listing of mutual funds in early 2008 so they are still considered a relatively new product.

“This is quite a fast-growing market, but it’s still at an early stage,” adds Mashayekhi.    

“Historically, real estate has been the most popular investment, but the slowdown is causing property developers to shift their focus to alternative investments.”

Today, there are 28 registered mutual funds which range in size from between $1m to $50m.

The firm is also looking to expand its activities further in 2010 through other investments.

“We are also looking at private equity deals, as well as investment banking opportunities,” says Ramin Rabii, managing director of Turquoise Partners. “We would like to list Iranian companies in other countries of a similar size and with a large Muslim population such as India, Turkey and Malaysia.”

It is also considering setting up a commodity fund to invest in small commodity-based companies such as iron ore and copper mines in Iran.