Southeast Asian Value Fund


“Interestingly, we have beaten the market quite handsomely over this time frame, although beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside.” – Seth Klarman

  • Founded in 2004; exceptional returns combined with low risk
  • Finds undervalued companies in Malaysia, Indonesia, Thailand and Singapore
  • Company specific investing with at least a three year view
  • Focus predominantly on under-researched and cheap stocks
  • Wellmanaged, cash rich and cash-flow positive companies will survive and prosper even in tough times
  • Buying cheap provides downside protection – Margin of Safety
  • We tolerate short-term volatility for long-term capital gain
  • Small companies are especially cheap

Underlying Beliefs:

  • ASEAN’s consumer story has decades to run
  • Asean alone has a population of 670 million –and they all want a house, two cars and high cholesterol just like the rest of us.
  • There will be hiccups but the trend will remain strongly positive.  A combination of a strong work ethic and low taxes will encourage and enable Asians to create and retain wealth.  Each year millions are moving from the fields to embracing urban consumer lifestyles.  This translates into changing consumption patterns –a generation ago bread was a rarity; now it is an urban staple.  Building a new road or bridge in the developing world has a massive multiplier effect on the local economy.

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Founded in 2004, the investment manager (company), with a team of 4 locals,  is a specialised fund management company dedicated to investing in Asia with a long-term, absolute-return and research oriented, value approach.

Its investment style is based on fundamental analysis backed by company visits, for which it believes there is no substitute.  Currently, the Investment Manager manages 1 fund, this Southeast Asian Value Fund, with investments in undervalued companies mainly located in Thailand, Malaysia, Indonesia and Singapore.   The Fund’s investment objective is to achieve long term capital growth through capital appreciation and income. The Fund seeks absolute returns rather than to perform in relation to any benchmark equity index.

The fund should be considered as a long-only vehicle.  Through its value approach, the investment manager typically finds neglected, often small cap, companies which no one likes but it doesn’t care as long as the macro story is good and if they can be bought inexpensively.  Little regard is given to geographical spread or diversification and the fund may hold 25% of its assets in the securities of one issuer at the time of   purchase.  Given the above, the performance may well be highly volatile.

The opportunity for an investor in this regional value fund is the investment industry’s obsession with liquidity.  The focus on liquidity results in smaller companies often trading at deep discounts to intrinsic values which leads to higher margins of safety benefitting the serious value investor.  In addition, the volatility of the regional stock markets the fund operates in generates great opportunities to buy excellent companies for prices way below its calculated intrinsic value.

And in order to establish the above mentioned intrinsic value continuous hands-on (company and on-site visits) research is needed in these countries.  The investment manager considers itself to be a research house that occasionally buys some stocks.  If there’s no-one in its office, they’re probably out seeing companies!

As an aside, the founder of this Southeast Asian Value Fund has a significant personal  investment in the Fund.

For more information, contact +31624611846 //