Q:  What is your investment philosophy?

A: There are plenty of ways to passively gain exposure to Asia. But to me, gaining exposure is only half the story. The other half is gaining the right exposure to Asia. Knowledge and experience are important because a lot of people approach Asia in a sort of a generic product manner. When you are exploring these new and unfamiliar markets, there is a natural tendency to follow the crowd. But that will also condemn you to mediocrity and we do not seek mediocre performance. We are deliberately being active, decisive, striking out on our own, getting early into names and exploring new ideas and markets.

We are not in the business of producing a generic product. We are trying to provide a product that genuinely adds value. Our core philosophy is that we believe that through active management we can make money for our clients.

Q:  Are you looking for absolute returns or for relative returns?

A: In this business you are usually judged by relative returns but our goal is to make money so we are looking for absolute returns. I believe our markets are conducive to doing that.

Q:  Do you measure yourselves against any benchmark?

A: We are divergent from benchmarks, but the key thing is to be aware that you are diverging from them, and to be conscious that you have done that. We have no compunction against being very different from the benchmark, but it has to be for a reason.

Q:  Do you consider yourself a fundamental investor, or are you looking to buy stocks cheap and hold them for three to five years?

A: We focus our performance on the stock selection level. We look at the top down, we look at the macro, and we look at the country risk. I don’t believe you are going to add a lot of value over time by taking big bets for and against certain markets.

Our competitive advantage is on the stock selection level. We can know more about a company than most of our competitors. We can get into a specific company earlier than our competitors.

On the macro level, we cannot really analyze what’s happening in Japan better than all our competitors. So, what we are trying to do is risk management. We are looking at the macro level to avoid currency problems, political problems, inflation problems and so on.

Q:  How do you go about portfolio construction?

A: I’m not a believer in having a single, onesize- fits-all strategy.

We are typically investing in fourteen markets in Asia. These markets are at different stages of development, economic cycles, and industrialization. That means we will buy growth if we can find growth at a reasonable value. In other situations, the value approach may be more appropriate. Similarly, we love a balance between large cap, mid cap and small cap. It’s very important to construct a portfolio with exposure in all those areas to balance each other out.

Q:  Is your investment style short-term or long-term oriented?

A: We are trying to create performance. We have a number of core holdings in the portfolio that we would hope to earn for years rather than months. If we can make a quick 25% in a month on a smaller name, we’ll take that as well.

Our fund is about $500 million at the moment. If I saw an investment opportunity that I thought would make our shareholders money, I would do it. I am happy we have the luxury of not having to only buy U.S.-listed companies or ADRs, for example.

Q:  Would you call your investment style opportunistic?

A: No, I think opportunistic has a slightly negative connotation. We are looking to exploit inefficiencies. The beauty of Asia and emerging markets is not just their growth, but the fact that those inefficiencies do exist. In a much more mature market like the U.S., the opportunity to add value is more marginal and fleeting. Information sources are much more efficient, there are many more people at the same knowledge level. In Asia there is plenty of room to get ahead of the crowd if you are experienced, if you have met many companies and have good contacts. You need to be proactive and you need to be sometimes a little courageous because invariably, the best investment decisions are those where you are in the minority when you make it, and then the majority gradually catches up later on.

Q:  What are the main characteristics of investing in Asia?