Teh Hooi Leng calls it a day (Aggregate Asset Management)

When I first started, I mostly stuck to Buffett's approach ie. quality stocks, "moat" and some undervaluation. I found that not to work for me as I am not good in being able to read businesses. But I am sure many of you here uses Buffett's method with good results. It didn't work for me, so I gravitated towards Graham's approach. Graham's approach requires less intellectual capacity and time. The layman or anyone time-pressed can manage it quite well. Graham can help one to achieve satisfactory results. When I first read Graham 25 years ago, I found his work too "dry" and "dull" - and I put the book away. But as I consistently failed to make good investments, I turned to him and found some redemption. At last, I manage to achieve some satisfactory results. Graham, without the aid of data and computers, manage to distill some methods of outperforming the market through his observation and experience. Later, then came reams of financial data that people can analyse. So I gravitated towards Fama and French. Fama and French put the rigour into Graham's methods. They are not really very different - as both still place emphasis on the fundamentals like earnings, book value and dividends. That explains our evolution. So we cherry pick bits and pieces from the experts and throw in some of our own studies and observations. We use to have this debate about which strain of value philosophy is better, Buffett or Schloss, concentrated vs diversified, PE vs Book Value, Greenblatt vs XXX and so on.... My guess is that all of them work, and sometimes one may outperform the other, one country may do better than the other for value, but over extended periods of time, they should even out. I think the really talented can achieve compounded returns of 20% or more, and the middle of the road value investors should do 15% p.a.

Thousands of get rich quick dreams dashed by scammers in Malaysia

QUOTE: 

Meanwhile, the central bank is offering some broad guidelines on how to spot a dubious investment:

"If you look at unit trusts, their returns are generally around 5 per cent to 6 per cent [each year] and these are the best portfolio managers," Bank Negara Governor Muhammad Ibrahim advises.

"The very good ones could offer 6 per cent to 7 per cent returns. So any numbers beyond this rate cannot be true." 

UNQUOTE..

Note:- The returns is similiar to EPF at around 6% p.a.

(06-06-2017, 02:46 AM)erickong Wrote: When I first started, I mostly stuck to Buffett's approach ie. quality stocks, "moat" and some undervaluation. I found that not to work for me as I am not good in being able to read businesses. But I am sure many of you here uses Buffett's method with good results. It didn't work for me, so I gravitated towards Graham's approach. Graham's approach requires less intellectual capacity and time. The layman or anyone time-pressed can manage it quite well. Graham can help one to achieve satisfactory results. When I first read Graham 25 years ago, I found his work too "dry" and "dull" - and I put the book away. But as I consistently failed to make good investments, I turned to him and found some redemption. At last, I manage to achieve some satisfactory results. Graham, without the aid of data and computers, manage to distill some methods of outperforming the market through his observation and experience. Later, then came reams of financial data that people can analyse. So I gravitated towards Fama and French. Fama and French put the rigour into Graham's methods. They are not really very different - as both still place emphasis on the fundamentals like earnings, book value and dividends. That explains our evolution. So we cherry pick bits and pieces from the experts and throw in some of our own studies and observations. We use to have this debate about which strain of value philosophy is better, Buffett or Schloss, concentrated vs diversified, PE vs Book Value, Greenblatt vs XXX and so on.... My guess is that all of them work, and sometimes one may outperform the other, one country may do better than the other for value, but over extended periods of time, they should even out. I think the really talented can achieve compounded returns of 20% or more, and the middle of the road value investors should do 15% p.a.

I share the same view. Thank for sharing.

One minor point to add. The selection of your approach, should also match with your temperament. You are the one to do the "boring job" after all for a long period of time.

"the middle of the road value investors should do 15% p.a."

Wow!

It makes me salivate if you mean CAGR.

Q. is for many years already?

i am happy to very happy if i can get 6 to 10 % CAGR for lifetime investing result.

Hi All

i have one question to ask and that is,

How do we classify Aggregate Asset Management, Yeoman Capital, Lumier Capital as mutual fund or hedge fund that adopted long only strategy? or what else?
(client required to be accredited)

Then what about funds that, for example run by Nikko Asset Management, UOB type of fund?

Sometime i really get confused.

Thank you in advance.

Singapore's Aggregate AM raises two-thirds of targeted S$5.2 million on private exchange
By Goh Thean Eu May 31, 2019
https://www.asiaasset.com/post/22420

Singapore-based boutique fund manager Aggregate Asset Management (Aggregate AM) says it has raised two-thirds of its targeted S$5.2 million (US$3.77 million) thus far from a listing on the city state’s sole regulated private securities exchange.

The company says the fundraising on the 1exchange platform kicked off on May 3 and some S$3.47 million was raised within ten days. The fundraising is scheduled to end on June 14.

The money will be used to build up the company’s middle and back office functions, bolster its equities research capabilities, and expand its operating capacity, Aggregate AM says in a statement on May 29.

Its three co-founders also intend to "unlock value from a portion of existing holdings and use part of the proceeds to buy out other minority interests in the company”, the statement adds, without providing more detail.

The co-founders are Wong Seak Eng, Kevin Tok and Eric Kong.

According to Mr. Wong, the "strong take-up" in the fundraising reflects "the substantial belief in our long-term performance prospects of our management company”.

"We look forward to delivering long-term sustainable returns to our investors and unitholders further to this exercise to strengthen our company’s capital base,” he says in the statement.

A spokesperson for Aggregate AM tells Asia Asset Management that the S$5.2 million targeted from the fundraising represents 5% of the company’s enlarged capital from the issuance of new shares to investors. This will dilute the founders’ combined shareholding to 70% from 75%.

She says the trio have an agreement to buy back the balance 25% now held by four minority shareholders, after which they will own 95% of the company. She declined to provide more details, including when the buyback will be exercised.
Established in 2012, Aggregate AM had S$503 million of assets under management at the end of 2018. Its clients are mostly high-net-worth individuals.

It looks like AAM is valuing itself at about $104m.

Assuming that its fund size remains the same at about $500m, and that its fund is able to generate gross returns of 10% p.a., this translates to a $50m bounty. Since AAM takes a 20% cut of this bounty, AAM will have a gross profit of $10m.

Let's say its salaries, rent, fees to service providers, and taxes come up to $2.5m annually, AAM will be left with a net profit of $7.5m. This values AAM at a p/e of 13.8.

Obviously, I do not have the actual P&L numbers so I could be far off the mark.

But from the take-up of the share sale, it looks like investors think AAM is priced too expensive. Why?

Assuming a p/e of 13.8% is not far off the mark, this translates to an earning yield of 7.2%. If AAM can consistently earn 10% p.a., an investor of AVF (AAM's fund) will be better off with a net 8% p.a. return.

In addition, the actual cash flow returns to an investor in AAM shares will be in dividends, which is probably lower than the earnings yield of 7.2%. If payout ratio is half, then the investor is only getting 3.6% p.a., and will be hoping for sufficient capital gains, if and/or when the opportunity to offload the unlisted shares arise.

The investors which bought AAM shares are probably hoping that AVF's fund size can double or triple, which -- if it is able to maintain its 10% p.a. returns -- can considerably increase its gross profit. And hence, an increase in the dividends and valuation of their AAM shares.

If AAM’s AUM goes to 1bn, the minimum mkt cap of the inv opportunity set will be 1b.
At 1 bn market cap, the market is more efficient. Don’t know if can outperform the index.

Anyway, investors are fleeting. If underperform for 3 years, you can be sure AUM will shrink Jialat Jialat.

Teh's Inclusif started in Jun 17*. If we compare the performances of both Inclusif & Aggregate from Jun 17 till Jun 19, they are quite identical.

*Inclusif performance : https://www.inclusif.com.sg/performance-1
Aggregate's performance : https://aggregate.com.sg/index.php/home/index > Click on "PERFORMANCE".

Aggregate's performance is available for a longer period, i.e. Dec 12 till Jun 19. Assuming both employ more or less the same investing strategy, we can see that the fund has returned about 57%, i.e. 100 (Dec 12) vs 157 (Jun 19), for a period of 6+ years(which is still not considered a long time imo).

In the Business Times article(link below), Mr Kong says "In the last three years, we could find stocks that paid 7 per cent dividends, with a net book value of S$1, a share price of 40 cents and PE in single digit. Such stocks give us big returns and little downside.
Reference : https://www.businesstimes.com.sg/magazin...g-on-value

As a layman, I think they have done well.   I am not vested(I am not an accredited investor) But I am dreaming of the day I can find such stocks with criteria defined by Aggregate !  

Focusing on value
Performance fee structure aligns with investor interests, says Aggregate Asset Management
TUE, DEC 05, 2017 - 5:50 AM

In the Business Times article(link below), Mr Kong says "In the last three years, we could find stocks that paid 7 per cent dividends, with a net book value of S$1, a share price of 40 cents and PE in single digit. Such stocks give us big returns and little downside.

I doubt AAM is following the above rule. Simply the AUM is too big. Imagine AUM $500m and 1% into 100 stocks. Minimum mkt cap for each stock will be $500m.
Mkt is surely more efficient at $500m than at $100m. Opportunity set surely smaller and more competition.

At bigger AUM, their old method may not work as well as when at small AUM.

Maybe should follow Walter Schloss. Keep AUM small and return excess profit.