We are an SFC licensed investment management company based in Hong Kong. We invest in stocks internationally and serve clients from various countries.
We invest to double our money in 3-6 years by selecting a few special stocks with small permanent downside risk and large upside potential. The intended rate of return is higher than the long-term stock market and other asset class averages.
We search for investments where the market price is at a large discount to our take-private valuation, where such value is growing and visible catalysts are in play to support the investment thesis.
We invest through Separately Managed Accounts, in which a client’s money is held in an account in the client’s name at a 3rd party regulated financial institution. This account is then managed by us as per our GFM Focus strategy.
From a client’s perspective, Separately Managed Accounts are transparent, safer, cheaper, and more tax-efficient than investing through funds.
We are very different from others. We co-invest alongside our clients, we are performance fee-only.
Why invest with GFM Focus?
Focused Long/Short Investing
Focus. We concentrate on the best investments that we know of, after repeated search and research. We invest after thoroughly investigating the thesis with real-world evidence over several months. Our typical portfolio will have 8-12 long positions and 15-20 smaller-sized short positions.
Long and short positions. Our long investments are usually event-driven situations or high-quality compounders. Short positions are usually structural decliners or stressed companies. This positioning helps us generate returns in both rising and falling markets.
Value and growth. We seek to buy at a large discount to our estimate of the take-private value of a business, after factoring in its growth potential. We value a business as if we are buying 100% ownership of the company forever with all of our family’s money. Like Buffett said, “price is what you pay, value is what you get”.
Performance Fee Only
We charge a 0% management fee. We charge a 25% performance fee, subject to the client’s portfolio being higher than its previous highest value (“the high watermark”). We are only compensated when the client’s portfolio appreciates beyond its previous highest value, otherwise not.
Performance fee is our only income source, with no other charges of any kind. We also pay for all operating expenses ourselves (fund managers typically charge such costs to their clients by expensing the fund entity).
We invest our own money alongside our clients in every investment that we make. Our goal is to protect and grow our collective capital over good times and bad. You will rarely find a fund manager who is willing to do this. We behave like an investment partnership alongside our clients, not as a service provider charging all kinds of fees irrespective of investment performance.
Separately Managed Accounts
Separately Managed Accounts are safer, cheaper, transparent, and more tax-efficient than investing through funds.
We open a separately managed account held in the client’s name at a third party broker-custodian. (we usually use Interactive Brokers) Only the client can make deposits and withdrawals in the account. Only GFM can invest the money as per its Investment Management Agreement with the client. The broker independently sends account statements and does fee calculations. Clients have 24/7 visibility into their portfolio and there are no hidden charges of any kind.
Becoming a Client
Step 1. Sign the GFM investment management agreement.
Step 2. We will help with opening a Separately Managed Account at Interactive Brokers (or alternative).
Step 3. Once the account is open:
– Only the client will have the login/password.
– Client will have enabled 2-factor authentication.
– Client will have funded the account through a wire transfer or a check.
Step 4. GFM will start managing the assets of the account:
– Invest and re-invest cash and assets in the account.
– All client accounts under GFM Focus will have the same portfolio after some time.
We invest to achieve a life of financial independence for our clients. One careful investment at a time.
– Interactive Brokers do custody of assets and execute buy/sell transactions.
– Interactive Brokers will directly send out client statements.
– Interactive Brokers will do the fee calculations as required.
Withdrawals / Deposits:
– Client makes deposits and withdrawals occasionally as required.
– Client coordinates with GFM to avoid any unintended portfolio consequences.
Terminating the relationship with GFM:
– Client gives a written notice to GFM as per the above agreement.
– Client and GFM agree to one of two scenarios as below:
1. GFM resigns from the account and client takes over the portfolio management of the account.
2. GFM liquidates the portfolio and then resigns. Client then withdraws the money from the account.