The Interview – Frédéric Durr, Maoming Investment Management: “Our role is to make higher returns and preserve capital whatever happens”
Frédéric Durr, a principal and fund manager with Shanghai-based Maoming Investment Management, says the firm’s Maoming Fund aims to generate returns while preserving capital through an intense focus on the companies it invests in, with liquidity the key element in risk management.
GFM: What is the background to your company and fund?
FD: The principals and managers at Maoming Investment Management are Julien Moulin, Ivan Qi and myself. The Maoming Fund, a Cayman-domiciled single-strategy equity with a regional focus on greater China, was launched on February 15, 2006. We currently have USD32m in assets under management.
GFM: Who are your key service providers?
FD: Our audit firm is Deloitte, our law firm is Appleby, the fund’s administrator is Apex Fund Services in Hong Kong and the custodian is HSBC.
GFM: How do you distribute the funds? What is the profile of your client base?
FD: We carry out the distribution of the fund in-house, targeting private and institutional clients. Currently assets under management are split between institutional investors with 25 per cent and private clients with 75 per cent.
GFM: What is your investment process?
FD: Our investment process is bottom-up with strong sector views.
GFM: How do you generate ideas for your funds?
FD: We generate ideas through screenings, relationships with key executives and industry experts, company visits, review of industry publications and conferences.
GFM: What is your approach to managing risk?
FD: Our risk system starts at the very beginning of our stock selection process by getting to know the company and its competitive environment extremely well, developing an edge on the particular company. We also tend to focus on liquidity (trends and abnormal selling pressure) more than value at risk reports, and we don’t apply any hard stop-loss given the nature of the Asian markets.
GFM: How has your recent performance compared with your expectations?
FD: Our performance has been in line with expectations, and we don’t expect to change our style going forward.
GFM: What opportunities are you looking at right now?
FD: We are looking at shorts as well as mining deals.
GFM: What events do you expect to see in your sector in the year ahead?
FD: More regulation is coming in. It will not affect our portfolio, but our set-up will evolve to meet the new requirements.
GFM: Are investors’ expectations shifting between capital preservation and growth?
FD: Our mandate is an absolute return fund investing in emerging markets. Our role is to make higher returns and preserve capital whatever happens, so our investors’ focus is to get growth with limited downside risk.
GFM: What differentiates you from other managers in your sector?
FD: We make money every year by applying our in-depth research on companies.
GFM: Do you have any plans for other product launches in the near future?
FD: Possibly yes.
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