“Vayupak Fund One” is ready to offer investment units of type A to general investors, with a total value ranging from 100 billion to 150 billion baht. It boasts a minimum annual return of 3.0% and a maximum of 9.0%, fixed for 10 years. The public offering for domestic retail investors will be open for subscription from September 16 to 20, at a price of 10 baht per unit, starting with a minimum purchase of 1,000 units or 10,000 baht. The offering will be conducted through six management companies and banks, with retail investors allocated units using the Small Lot First method to ensure equal distribution. The fund aims to register its type A units on the stock exchange within October.

Ms. Chawinda Hanratnakul, Managing Director of Krung Thai Asset Management Company Limited (Public) as the fund manager of Vayupak Fund One, revealed that the fund was established on July 1, 2003, by a cabinet resolution, as a closed-end fund with a size of 100 billion baht. Its objective is to manage state-held securities for maximum benefit, creating sustainable long-term returns by investing in essential and beneficial economic activities that require government support, while also promoting the development of the capital market and providing more savings and investment options for the public. In 2013, the management company repurchased all type A units and converted the fund into an open-end fund, retaining only type B unit holders, which include the Ministry of Finance and state investors. As of September 6, 2024, the fund has a net asset value (NAV) of 353.596 billion baht and is now offering type A units to general investors with a total value of 100 billion to 150 billion baht.

From 2014 to 2023, the fund has consistently received dividends from its investments, averaging 12.278 billion baht per year, which translates to a dividend yield of 3.75% of the net asset value, sufficient to pay the minimum annual return to type A unit holders. Additionally, the fund has a stable financial position, with retained earnings of approximately 142.739 billion baht as of June 30, 2024.

The fund has an investment policy that includes both active and passive management strategies, primarily investing in stocks listed on the stock exchange, focusing on companies with strong fundamentals, long-term stability, sustainable operations, and good corporate governance, such as companies in the SET100 that have received an A rating or higher in SET ESG Ratings, or non-SET100 companies with high SET ESG Ratings. The fund may also consider investing in infrastructure funds, real estate funds, and real estate investment trusts that offer good returns or high growth potential, liquidity, and good corporate governance.

Mr. Warah Sujaritkul, Chairman of Finansa Securities Co., Ltd., as the financial advisor for Vayupak Fund One, stated that the proceeds from the sale of type A units will primarily be invested in the stock market. The returns from the fund's investments each year will be paid to type A unit holders in the form of dividends based on the actual returns of the fund, at a rate of no less than 3% per year and not exceeding 9% per year. Type A unit holders will receive dividends at least twice a year, calculated from the par value of 10 baht per unit. This is not a guarantee of returns but a mechanism to protect the fund's returns, ensuring that type A unit holders receive dividends before type B unit holders. The remaining returns will belong to type B unit holders.

Type A unit holders have the right to receive their investment back according to the Waterfall repayment method, meaning they will be repaid before type B unit holders, starting from the initial investment value of 10 baht per unit. However, this mechanism does not guarantee that type A unit holders will receive their initial investment back. If the total NAV of the fund at the end of the initial investment period (10 years) is lower than the initial investment value of type A units, type A unit holders may receive less than their initial investment.

After the initial investment period of 10 years, if the fund wishes to raise more capital, type A unit holders will have the right to extend their investment period or redeem their units according to specified guidelines. However, if the fund does not intend to raise more capital, the management company will automatically repurchase or redeem all type A units.

The fund has a risk management mechanism by setting an Asset Coverage Ratio (ACR) of the fund's total net assets to the investment of type A units. Based on the total NAV of the fund as of September 6, 2024, and if the offering of type A units totals 150 billion baht, the ACR will be approximately 3.36 times. If the ACR falls below 2 times for five consecutive business days, the management company will increase the proportion of liquid assets or reserve funds to ensure sufficient dividend payments to type A unit holders for about two years. If the ACR falls below 1.5 times for five consecutive business days, the management company may consider converting investments into liquid assets, not less than the initial investment of type A units, within 90 days and keep it as a reserve according to the repayment measures for type A units, gradually converting assets for the benefit of type A unit holders or automatically repurchasing type A units from all or some type A unit holders. Thus, it is as if type A unit holders are protected by the risk management mechanism before type B unit holders. In return for this protection, type B unit holders will receive dividends or have the right to redeem their units throughout the project's duration from the excess NAV of type B units over the initial NAV of type B units at 300 billion baht.

Mr. Thanachot Rungsitthiwat, Managing Director of MFC Asset Management Public Company Limited, as the fund manager of Vayupak Fund One, stated that the fund will offer type A units to general investors at a selling price of 10 baht per unit, with a total value of approximately 100 billion to 150 billion baht. Investors will be divided into two groups: Group 1 consists of retail investors in the country, who must be Thai nationals residing in Thailand and at least 20 years old, or legal entities established under Thai law, or personal funds of such retail investors. Initially, the allocation for type A units for this group is set at 30 to 50 billion baht. Group 2 consists of institutional investors and specific legal entities, approximately 100 to 120 billion baht. The management company and distributors have the right to change the number of units offered to each investor type and may consider increasing or decreasing the allocation for each type of investor (Claw back / Claw forward) or changing the allocation method as appropriate.

The fund has received approval for project amendments from unit holders and has submitted a revised prospectus to the SEC, which has been published for general investors. The subscription period for retail investors will be from September 16 to 20, 2024, with a minimum subscription of 1,000 units or 10,000 baht, increasing in increments of 100 units or 1,000 baht at the offices and/or online channels (for those who subscribe online) of the management company and eight sales support companies, including 1) Krung Thai Asset Management Company Limited (Public) 2) MFC Asset Management Public Company Limited 3) Bangkok Bank Public Company Limited 4) Krung Thai Bank Public Company Limited 5) Krungsri Bank Public Company Limited 6) Kasikorn Bank Public Company Limited 7) Siam Commercial Bank Public Company Limited and 8) Government Savings Bank. The allocation will be done using the Small Lot First method, ensuring equal opportunities for all subscribers.

During the subscription, subscribers must pay the full amount for the units they wish to purchase at the price of 10 baht per unit. Those who do not receive the full number of units they subscribed for will be refunded within seven business days after the subscription period ends for all investor types. Interested parties can request the prospectus and subscription forms from all management companies and sales support companies. The allocated units will be in a scripless format, allowing investors to receive the units in their own securities accounts or deposit them with the registrar in the issuer's account (Account 600). However, if units are deposited in Account 600, they cannot be traded on the first day of trading on the stock exchange. If investors who have deposited units in Account 600 wish to buy or sell units on the stock exchange, they must open a trading account with a brokerage firm and transfer the units from Account 600 (according to the specified procedures) to their securities account for trading on the stock exchange. Additionally, subscribers can request to issue unit certificates after the units have been registered for trading on the stock exchange and have deposited the allocated units into their trading accounts or Account 600, subject to fees as determined by Thailand Securities Depository Co., Ltd. (TSD).

Once type A units are registered on the stock exchange, investors, interested parties, and unit holders can buy and sell type A units through the stock exchange on all business days, and can freely transfer type A units. The price of type A units in the secondary market will be determined by market mechanisms, which may differ from the par value, offering price, or net asset value of type A units.

“We believe that the offering of type A units from the fund will attract interest from general investors looking for stable long-term returns in the form of dividends under the specified conditions from the securities invested,” Mr. Thanachot concluded.