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We are Vermeer Partners, and we’ve created this series to shed light on some of the topics running hot in the investment community today. With insights from industry experts in their own Golden Eras, we reveal some of the issues investors face in today’s often complex, investment world. Whether you are a seasoned industry professional or an enthusiast beginning your investment journey, we hope you gain some valuable insights and enjoy the series along the way. And if you want to find out more, please do get in contact with us.

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The information provided during any of Vermeer Investment Management's Art of Investment podcasts does not constitute investment advice nor should it be considered a recommendation to buy or an offer to sell a particular security or investment. It is not intended to address your particular requirements. Vermeer Investment Management Limited, Guests and Presenters may have positions in any of the investments discussed. Investors should remember that the value of investments, and the income from them, can go down as well as up. You may not recover what you invest. Past performance is no guarantee of future performance and your capital is at risk.

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  2. Investing in Asia with Tom Naughton, Prusik Investment Management

Investing in Asia with Tom Naughton, Prusik Investment Management

Aug 24, 2021

This week we turn our attention to investing in Asia with Tom Naughton, Managing Partner and Chief Investment Officer of the Asian investment boutique, Prusik Investment Management. Tom was a great guest with unparalleled knowledge of the Asian investment markets and it was fascinating to listen to his career journey to date.

 

We looked back to Tom’s early experiences at the Universities Superannuation Scheme (1.20), one of the largest private pension schemes in the UK, where he met mentors Peter Moon & Clive Edwards (2.33) who helped develop his unconstrained, absolute return mindset he still employs today.

 

In 2002, Tom then moved out to Hong Kong and was hugely successful in scaling a hedge fund with PMA Investment Advisers (3.46). Nothing quite focuses the mind when ‘rent was almost the same as my salary’ and he spoke candidly about the importance of making ‘money in order to live’ while out there (4.30).

 

I asked Tom whether it was hard to raise the initial seed capital for his income fund at Prusik Investment Management when he returned to London in 2010 (6.25). We then discussed what makes Asian economies an attractive place to invest for income (7.36).

 

Tom has a very focused portfolio and we discussed which sectors his team invest in, and also those that they avoid (9.15). Did his fund keep paying dividends last year during the height of the pandemic? (10.36). Once Tom finds a high-quality company, he then focuses extremely hard on valuation (12.48) and references the St Petersburg Paradox to illustrate today’s valuation dilemma (13.25).

 

As the Chinese authorities crank up regulatory pressure on various sectors, I ask Tom if China is investable today (15.35) and he talks through the thesis behind investing in telecoms. What about Hong Kong, given the National Security Law concerns – is there money to be made in equities there (21.34)? How are Asian countries currently dealing with the pandemic (24.30) and what are they doing from an ESG perspective (26.45)?

 

In Tom’s capacity as Managing Partner of an investment boutique, I ask what the firm are trying to achieve and what are the advantages of being a boutique? (29.46). ‘Best outcomes for clients’ were words that struck a chord with me. Finally, Tom shares some advice for those looking to enter the industry (31.42), some essential reading (33.58) and a couple of investor icons he would like to meet (35.50).