ValueCAP has performed well since inception creating value for its stakeholders consistently. Seeded at the initial stage for funds amounting to RM5 bill, the fund today stands at approximately RM 8 billion. Fund managers therefore must capitalise on investment opportunities at various cycles of the market. The way forward is promising. We have built on talent and capability over the year’s. There of course, lies tremendous opportunity ahead for the fund to tap on and exploit on investment opportunities.

ValueCAP has successfully released additional institutional money to the market and effectively invested these monies from a return perspective. The Government’s efforts to collectively enhance standards of professionalism in portfolio management has crystallized to the extent that ValueCAP has to-date put in place a team of professional Managers able to generate competitive rate of returns via employment of prudent investment techniques and processes.

The formation of ValueCAP injected liquidity to the market by releasing additional pools of institutional money to the equity market. In doing so, it took opportunity to buy up cheap and relatively undervalued stocks at a time when such stocks were not looked at, eventually allowing such stocks to trade up to their ‘intrinsic values’. ValueCAP’s participation in such instances helps to alleviate volatility to some extent.

Because we are value managers, we are adequately resourced particularly with investment professionals to support the Company’s present and future investment activities.

The existence and formation of new pools of institutional funds in the market carries with it long term benefits. Such pools of funds not only provide diversity but also add to liquidity in the domestic market. There is no question of competition or conflict. Co-existence of more professionally managed funds can only add value in the long term to the industry.

As does any portfolio investor, ValueCAP also operates within a clearly defined mandate based on specific investment and return objectives.

Khazanah, PNB and KWAP each have an equal shareholding in ValueCAP. As equity investors these institutions therefore enjoy returns in the form of dividends which in turn is very much dependent on the financial performance of ValueCAP.
 
The difference between ValueCAP and the investment decisions of these institutions is that ValueCAP operates as a private entity whose business activities and processes are governed by its own independent Board / Investment Committee, etc. It is a known fact that institutions that have in-house investment decisions farm out monies to external managers for various reasons. In the case of ValueCAP, such institutions have taken an equity stake instead, and therefore look to returns in the form of dividends.

ValueCAP is governed by an independent group of Directors and Investment Committee representing both its shareholders and also various independent directors. The Board of Directors as such has been entrusted to determine the overall policy and management of the Company. In this regard, note that all investment decisions made by ValueCAP are independent of investment decisions or strategies of its shareholders.

The formation of ValueCAP represents a collective effort by the Government to promote even higher standards of professionalism in fund management practices other than what is currently in place. Channeling of funds to ValueCAP releases additional institutional money to the market via an entity that is free from the pressure of having to meet annual obligations to shareholders, thereby allowing the company to focus its resources on investment opportunities in the longer term. The company therefore need not focus on trading positions to meet short-term profit objectives. Such flexibility will allow for more efficient utilization of funds in the longer term.

No, the company is intended to only manage money for its shareholders. There is no intention to solicit and manage funds for other external parties.

There is already a mandate. What's important is that we do not miss opportunities. The domestic equity market has retraced to attractive levels that merit and provide opportunities to value investors like us. These are opportune times for investors as there lies value across segments of the market.
 
There is no restriction to any particular sector. Investments activities are guided by fundamentals i.e. in the stocks of companies with sound financials and long-term growth potential.

ValueCAP managers are value managers and essentially seek to provide superior long-term returns regardless of market direction through its long-term investment returns and trading activities. Our managers’ performance thrives on a disciplined investment process that is fundamentally driven and backed by quantitative models.
 
On the issue of style, we all know that the turbulent markets today require portfolio managers to blend styles in order to achieve their stated objectives. Through experience, being contrarians allows for more headway in the longer term.

In most cases, the client or shareholders makes the asset allocation decision. It’s the same with ValueCAP. As equity specialist, various strategies/styles will be employed to optimize returns to its shareholders.
 
An aggressive market timer may vary equity allocation to between 95% in bull markets to 0% in bear markets or vice versa. Others may remain invested across market cycles and not reduce their equity exposure. In any case, a fund manager’s equity allocation should be consistent with his/her view of the market.

Risk Management is an integral part of the portfolio construction process at ValueCAP. There are various methods employed to measure and monitor risk i.e. Beta, tracking error etc. ValueCAP to-date employs similar standards in evaluation and assessing portfolio risk and may in the longer term develop in-house models that may be shared with other public sector entities.

Many a time the investing public overreacts to unfavorable developments in the market. Investors often forget that these events create special opportunities particularly in instances when one deals with blue chips. Past experiences indicate that bad news often time is good news because it makes good stocks cheap.
 
We mustn’t forget that common stocks historically have been unrivalled by any other investment alternative, including real estate and gold.
 
Investing can be made a very complicated matter. There are many variables out there particularly in trying to forecast corporate earnings and then there are also sophisticated models that allow analysts to decipher stock valuation levels. There’s enough information out there that will guarantee investors to see the forest from the trees.

To reiterate, we have always been value managers and always seek to provide superior long-term returns regardless of market direction through our long-term investment activities.