Strategic vision:
Build a portfolio of quality businesses

Finding mispriced, superior businesses with trustworthy management teams.

We invest across Asia

Our strategy is to own around 30 companies, acquired at a temporary discount thanks to the systematic exploitation of market mispricing common in some parts of Asia, with management teams we can trust.

We focus on inefficient segments of the Asian equity market, where companies are not followed by brokers, as they typically do not require financing from banks, and disclosures are limited or not always available in English.

We meet with management teams across the region all year-round, which gives us a precise insight of their business models. We typically focus on understanding the businesses moats and cash-flow drivers rather than short-term financial reports.

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Our demanding investing criteria lead to a clear focus

We have an on the ground engagement approach

Visiting prospective investments and portfolio companies in Manila, Shanghai or Tokyo is one of the greatest perks of investing in the region. When exploring new investments, we can rapidly see which companies value the opportunity to engage with investors who ask insightful questions about what truly drives their business and the company culture. We have found that providing honest feedback and clear recommendations on their strategic positioning or capital allocation policy can engage the right kind of management teams, fostering ongoing discussions.

For existing portfolio companies, this means that we often get to move from an initial meeting with the Investor Relations team to deeper conversations with the broader management team or entrepreneur.
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Given the limited access to qualitative data on management’s perspectives and strategies in the region, these meetings and trips are not only enjoyable but truly invaluable!

We have been investing in companies that are typically three times as profitable as our benchmark, the MSCI Asia Small Cap, at a third or its valuation.

We pay close attention to corporate governance and alignment that we, minority shareholders, have with management teams. We have also developed detailed checklists of the numerous bad practices that we have encountered in the region over the years to identify potential frauds or pitfalls early in the process.

Having systematically followed these principles, we have been able to significantly outperform our benchmark over the years, while reducing the risk of permanent loss of capital.

Growth

Growth

+

Value

+

Capital Preservation

Return
on Equity

20%

Track record of
capital efficiency

20%

EV/EBIT
‍

20%

Attractive valuation

5x

Dividend
Yield

20%

Margin of safety

7%

Earnings
Growth

20%

7-year earnings
momentum

15%

20%

P/E
‍

10x

Net
Cash

20%

21%*

*As % of market capitalization