Lumiere Value Fund

(14-08-2012, 05:48 PM)etan Wrote:

(14-08-2012, 04:09 PM)Musicwhiz Wrote:

(14-08-2012, 02:54 PM)Contrarian Wrote: My fund with D.O.G. is a lot less in upfront fees. It is driven by return, which is more aligned to fund investors. What's more, he shares his own holding statement quarterly. Not many fund managers will put his $ where his mouth is...

Wow cool! Good to know. One day I hope I can also attain the accredited investor status so that I can place my funds with d.o.g.! Haha!

I have an idea! Wonder if d.o.g. is interested?

How about pulling resources together, say per lot share of $100K x 10 pax = $1 mil.

Timing in the market is of essence.

Can make it happen?

Also, sometimes I think to myself: One fine day, VB will produce someone like OHL or Peter Lim! Just wait and see, ahahaha!

pooling fund from public need license. Pooling from accredited investors and other retail investors are different licenses.

(14-08-2012, 06:26 PM)Contrarian Wrote:

(14-08-2012, 03:12 PM)KopiKat Wrote:

(14-08-2012, 02:54 PM)Contrarian Wrote: My fund with D.O.G. is a lot less in upfront fees. It is driven by return, which is more aligned to fund investors. What's more, he shares his own holding statement quarterly. Not many fund managers will put his $ where his mouth is...

You're making many here turn green with envy as many here don't qualify...

PS. Envy not cos' you qualify but cos' client of d.o.g....

If u have worked 20 years, stay disciplined on living same lifestyle, u will do better than me for sure. No need to be envious.

I still do my own investing though ... Last 18 mths has been very good in a sideways market...

As I have stated, the envy for most is not your accredited status but rather, you are a client of d.o.g.

Why?

At this stage of his career (with an established track record), I'm very sure he can easily afford to pick and choose who he wants as his client (as compared to when he just started - no track record). As such, and assuming he's still restricted to only 30 clients (for RFMCs), I'd think the preferred choice of clients would be those who not only have (or potential to have) a much bigger amount of investible funds but who are also willing to commit that amount to be managed by him.

Put it simply, $2Mil may now be 'peanuts', even if you are willing to commit the whole amount to him...

(14-08-2012, 06:26 PM)Contrarian Wrote: If u have worked 20 years, stay disciplined on living same lifestyle, u will do better than me for sure. No need to be envious.

I still do my own investing though ... Last 18 mths has been very good in a sideways market...

What lifestyle do u follow? Mind sharing? Thanks.

Can I be a cheapo and infer through your individual posts?
[/quote]

You can infer as you like. My investing style is both similar and different from DOG.

There are many ways to invest and get a return. I make mistakes and so do DOG. Even Buffet makes mistakes.

The $2M threshold includes CPF, insurance cash values...

Quote:Just curious how the calculations work. If someone put money in at inception at $1 and now the NAV is 98c, it appears that he has lost money. However, why is the cumulative returns showing a large +ve gain? The difference is due to fees?

I assume you are looking under the "Performance" tab on the company's website. The chart showing a NAV per unit of <$1 as of 31 July 2012 is measured in SGD and runs till 31 July 2012. The table below measures their performance in USD and runs till 30 June 2012. So the difference you noted is due to both currency used and period measured.

FYI, for the period from 30 Sep 2008 to 30 Jun 2012,

The counter STI ETF by State Street (ticker:ES3) increased from S$2.45 to S$2.95, while paying out a cumulative S$0.285 in dividends for a total cumulative return in SGD of 32% (without reinvesting dividends).

And the counter S&P 500 Index ETF (ticker:SPY) increased from US$115.99 to US$136.10, while paying out a cumulative US$8.56 in dividends for a total cumulative return in USD of 24.7% (without reinvesting dividends).

---------------

Edit: corrected my figures for SPY returns. Numbers taken from Yahoo! Finance and SGX website. Please correct me if I'm wrong.

The fund charges a 1% management fee and 20% performance fee with high water mark.

Assuming $1,000,000 investment and a respectable and conservative long-term 10% year-on-year investment return:

20% performance fee would mean that the $100,000 investment gain would be reduced to $80,000 (i.e. real investment return will be only 8%). And after that, the 1% management fee will reduce the real investment return to 6.92%).

So the costs are actually pretty high (~3%); much higher if their long-term investment return beats the market significantly. Or is this just the industry norm?

(15-08-2012, 12:01 AM)mysterion Wrote: The fund charges a 1% management fee and 20% performance fee with high water mark.

Assuming $1,000,000 investment and a respectable and conservative long-term 10% year-on-year investment return:

20% performance fee would mean that the $100,000 investment gain would be reduced to $80,000 (i.e. real investment return will be only 8%). And after that, the 1% management fee will reduce the real investment return to 6.92%).

So the costs are actually pretty high (~3%); much higher if their long-term investment return beats the market significantly. Or is this just the industry norm?

You have missed the water mark. Say it is 8%.

For a $1m investment, the 20% performance fee only kicks in after $80k. So it is applied to the $20k only. ie, $4k.

So the fees are about $10k management fee + $4k performance fee.

Your $1.1m will become $1.086m or so. So they take about 1.4% based on 10% results.

The Lumiere manager probably has not experienced a major decline before except GFC.
Their gross exposure dropped to 64% in mar 09 coincidentally at the lowest point of the GFC or STI index.

They also reduced their exposure in last Oct 11 probably because of the impending Euro crisis.
Of course, no one can forsee any impending crisis. But, a value investor should probably be braver when the crisis is at the deepest.

(15-08-2012, 07:02 AM)yeokiwi Wrote: The Lumiere manager probably has not experienced a major decline before except GFC.
Their gross exposure dropped to 64% in mar 09 coincidentally at the lowest point of the GFC or STI index.

They also reduced their exposure in last Oct 11 probably because of the impending Euro crisis.
Of course, no one can forsee any impending crisis. But, a value investor should probably be braver when the crisis is at the deepest.

Perhaps it has something to do with redemptions?
IMO, the most difficult thing about managing a Fund is,

1) Most people only gets interested in investing when the market is 'hot'. During such times, it's more difficult to find stocks that are undervalued. Idle cash may actually drag down overall performance.

2) Most people gets fearful when market is having a severe correction. They'd want to 'cut loss'. Faced with redemptions, a Fund Mgr who's fully vested (for the fund) would be forced to sell his 'gems'. If the redemption is large enough, the Fund Mgr may actually end up being responsible for pushing the share price of his stocks to a new low...

So, if I were a Fund Mgr, I'd ideally like to be able to stop accepting new funds when market is 'hot' and only accept new funds when market is having severe correction. At the same time, must have some kind of mechanism in place to 'lock' in the funds such that I won't be forced to sell when valuations are cheap...

Nah... not easy to manage other people's monies...

Lumiere has a one year lock-in period.