We look for businesses with three factors in particular: an economic Moat, Durability and most importantly, compounding potential.
These three are sources of qualitative insights that are less efficiently priced, enabling us to potentially unearth hidden champions that are mis-priced yet with a long runway of growth.
As mentioned in the book “Hidden Champions of the 21st Century“:
“If I had to choose one single explanation for the outstanding and continuing success of the hidden champions, it would without a doubt be the personalities at the top.”, our team looks for companies that are Founder-Led with High Ownership; Aligned with Stakeholders through their Values and Passion; have a Track Record showing their capabilities.
As with all investments, the team strives to understand what are the key risks involved, with the intent to make better decisions, or rather, how to avoid making stupid ones.
Decision-making is not about making brilliant decisions, but Avoiding Terrible Ones. It is presumptuous to assume that we will not make mistakes and dumb decisions; in fact we may make more, but we aim to be on high alert to avoid the big or “fatal” ones.
We are confident of our Risk Assessment Process which is able to Detect Accounting/Credit & Misgovernance Risks.
“You look at all the successful companies, what is the key? Their brainpower. The thinker, good management, good innovators… Successful CEOs are like gems you find on a beach. There are many pebbles, many beautifully colored ones, but they are all stones. Now and again, you will come across a real precious gem, a real emerald, pick it up, polish it. He must have a set of qualities that fits with the job, has energy, drive, ability to interact with people, ability to get people to work with him in a team.”
– Lee Kuan Yew, founding Prime Minister of modern Singapore, in Hard Truths to Keep Singapore Going
The essence of equity investing is – buying (and staying invested in) only those stocks where there is a significant Value-Price gap.
Equity valuation is a continuously evolving practice. In his book Investing – The Last Liberal Art, Robert Hagstrom traces out five phases of valuation – discount to hard book value in the 1930s-1940s, Dividend yield in the 1950s, Earnings and Earnings growth in the 1960s, ROE & Cashflow in the 1980s, and Cash return on invested capital now.
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All investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus and, if available, a summary prospectus, contain this and other information about the Fund. All investors are urged to carefully read the prospectus and, if available, the summary prospectus, in its entirety before investing.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance data quoted. For more information about a fund, click on the prospectus or summary prospectus link above.
Past performance is not necessarily indicative of future results. There can be no assurance the Fund will achieve its objectives or avoid significant losses.
Due to MAS regulation for RFMC, the Hidden Champions Fund is currently only available to Accredited Investors*.
*An accredited investor is defined as either an individual whose net personal assets exceed S$2 million, whose financial assets (net of any related liabilities) exceed in value S$1 million (or its equivalent in a foreign currency), or whose income in the preceding 12 months is not less than S$300,000; or a corporation with net assets (based on its most recent audited balance sheet) exceeding S$10 million.