Overview

About the Fund

The Quarz Active Value Fund invests in ~20 core positions and focuses on undervalued small and mid-cap equities in Asian developed markets (Singapore, Hong Kong, Australia, Japan). We engage with the management teams of our target companies and prompt them to increase shareholder value through measures such as selling unprofitable units, returning idle cash to shareholders, selling undervalued real estate assets, improving corporate governance and strengthening alignment of interest with shareholders and investor relations. We only invest in firms with upside potential of ~30% over two years, sound core operations and a healthy dividend yield, thus providing downside protection and a regular income.

Quarz Active Value Class S is based in Liechtenstein and set up for investors looking for an onshore investment opportunity.

Annualised Return Since Inception

10%+

Inception Date

September 2018

Domicile Liechtenstein
Custodian VP Bank AG
AIFM VP Fund Solutions
Auditor PricewaterhouseCoopers AG
Fund type Alternative investment fund (AIF)
ISIN LI0425084352
Minimum investment 1'000'000.00 SGD
Distribution Accumulating
Latest Factsheet
Objective

The problem about value investing is that undervalued equities don’t always revert to the fair value. They just stay where they are, and the undervaluation persists. The reason is the lack of a trigger to unlock shareholder value – because of a lack of publicity, lack of analyst coverage, or lack of professional investors pushing for a higher valuation. We deliver this ‘trigger’ by pushing, internally or publicly, for fair value.

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Behind the scenes

Fund Managers

Joined Quarz

2011

Jan F. Mörmann is the Founder and CIO of Quarz Capital. Prior to founding Quarz, Jan was with the Equities & Wealth Management Groups of UBS, Credit Suisse AG and LGT in Germany, Switzerland and Hong Kong. He subsequently joined the Investment Banking Division of Bellevue Group (Switzerland). Jan holds a Bachelor of Arts in Business Administration as well as a Master of Arts in Banking & Finance from University of St.Gallen (HSG) in Switzerland.

Joined Quarz

2015

Havard Chi leads our research activities with his team. Havard joined Quarz following a successful six year career at Bellevue Asset Management where he was the co-head of the firm’s Asian and African investment portfolios. Prior to that, he was with Citibank. He holds a Master in Arts (HSG) in Banking and Finance from the University of St. Gallen and a Bachelors in Economics from the National University of Singapore. Havard is a CFA charter holder.

FAQ

  • Quarz Capital is a Singapore-based value investor, using an activist approach to unlock shareholder value at listed small- and mid-cap companies in developed Asia. Since out start in 2014, we have done about 20 successful campaigns, engaging in operational and hands-on activism. Each campaign is the result of extensive screening through fundamental value and financial analysis as well as comprehensive due diligence, helped by our excellent network in the region.

  • We invest in undervalued small and mid-cap equities across developed Asia (Singapore, Hong Kong, Australia Japan.) We prefer those jurisdictions because of the strong legislation and strict jurisdiction, which safeguard investors’ interest.

    In case we see opportunities in particular regions or areas, we might add a small percentage of stocks beyond Asia. however, this share will not exceed 10 percent of the portfolio.

  • The problem about value investing is that undervalued equities don’t always revert to the fair value. They just stay where they are, and the undervaluation persists. The reason is the lack of a trigger to unlock shareholder value – because of a lack of publicity, lack of analyst coverage, or lack of professional investors pushing for a higher valuation. We deliver this ‘trigger’ by pushing, internally or publicity, for fair value.

  • Contrary to the general understanding, activism does not always mean going public and clamouring for a higher valuation.

    The first option is to approach the board and management of our target companies privately and engage them in a conversation about the strategy. Another option is to voice your concern ahead of AGMs. This alerts other shareholders and may create some momentum to reject management proposals and submit dissenting opinions.

    And finally, in case we feel that those options or not sufficient and we don’t get heard, we might go public. We engage with the press and TV or make our point through a separate campaign website or through social media. Or we contact proxy advisors and explain to them our view on the company policy, hoping that they will follow our suggestions for a change in company policy.

  • Short selling is the strategy of borrowing equities and selling them with the expectation of falling prices and the ability to pocket the difference. We don’t do short selling because we see it as too risky. Unlike a long strategy, where your maximum loss is the amount invested, the loss can be much higher in a short selling strategy.

  • No. We also see it as too risky.

  • We seek to make 30% in as much as two years with every campaign we do.

  • We charge a 2% management fee and a 20% performance fee per year.

  • 1 million Singapore dollars or the equivalent in other currencies.

  • Our funds are only for accredited investors, meaning individuals with net assets of S$ 2 million or an annual income of S$ 300,000.

  • The high-water mark mechanism means that portfolio managers only get performance fee once the net asset value is higher than at any point of time in the past. It ensures that portfolio managers don’t get rewarded twice after a period of negative returns, thus protecting investor’s interest. Yes, we have the high-water mark in place.

  • No. Investors can redeem their funds at any time. However, due to liquidity constraints, we have a notice period of 90 days, meaning it can take up to 90 days before the investor gets his money returned. Usually, this period will be much shorter.

  • We have assets classes for all major currencies – US Dollars, Euro, Swiss Franc, Singapore Dollars.

  • Our investors can redeem their funds at any time (respecting the minimum notice period)

  • About one third of our assets under management comes from the founder’s family, ensuring a strong alignment of interest.

  • Yes. Our Quarz Active Value Fund and Quarz Global Opportunities Fund are Cayman vehicles. The Quarz Active Value Class S fund is based in Liechtenstein, making it a good investment for European investors looking for an onshore vehicle.

  • Different investors have different risk-return requirements.

    The Quarz Active Value Fund employs our deep value / activist strategy. It is the right opportunity for investor looking for an Asia equity allocation with returns beating Asia’s benchmark (MSCI Asia ex Japan’s Topix, Singapore’s STI, Australia’s ASX and Hong Kong’s HSI) by a wide margin.

    The Quarz Active Value Class S uses the same strategy and has similar returns, but is domiciled in Liechtenstein, giving European investors extra reassurance as an onshore vehicle.

    The Quarz Global Opportunities Fund is a case-by-case fund, which focuses on our current case as an activist investor. Investors can inject money for the time of the campaign and redeem their funds after the campaign has reached its objective. As a consequence, the Quarz Global Opportunities Fund has higher concentration and higher returns than Quarz Active Value and Quarz Active Value Class S.

  • Quarz Capital is a strong proponent of good corporate governance as we press companies to meet the demands of minority investors. This is a particular relevance in Singapore, where the concerns and objections of retail investors often don’t get enough attention. In many of our campaigns, we have argued for a better price in a takeover situation, thus supporting small shareholders.

    So while we regularly make sure our investments fulfil environmental, social, and governance (ESG) criteria, we take particular pride in emphasizing the “G” in ESG.

    Having said that, we are not a ‘green fund’ , we don’t engage in greenwashing, end we don’t prioritize ESG compliance over returns. First and foremost, we strive to have a decent performance for our investors.