MILLIONAIRE

HEDGE FUND CEOs

Brought to you by INTEC Debating Society (mINDS) &
Professional Accounting Society (PACE)

This event is sponsored by

Student Development Partner Diamond Sponsor

 INTRODUCTION

Objective

This module aims to:

● Expose to the participants on the examples of real-life global hedge fund companies
● Promote an investment culture amongst the participants
● Expose the students the plethora of investment options available in the market
● Give an understanding to the participants on how a hedge fund company operates
● Give awareness to the students on how the financial market impacts the global economy

Challenge Overview
You are now the strategic management of your assigned hedge fund company. There is
an increased interest amongst the four hedge fund companies on the investment opportunities that
exist in Malaysia.

Your task is to understand the nature of the hedge fund companies that you are assigned to
and construct an investment portfolio based on the investment options given. Your investment time
frame would be a period of 2 years with the total fund of RM100 million.

The judges will represent your fundholders and the shareholders of the company. You
are required to convince the fundholders and the shareholders on your newly constructed investment
portfolio to increase and improve the performance of the company’s fund.

You will be provided with a piece of brief information about your assigned hedge fund
company and the investment options available. We highly advise you to make more analysis on
the overall investment philosophy of the hedge fund companies and evaluate the performance
of the provided investment options.

You would have to produce a maximum of 15 slides explaining the following:

1. Nature and investment philosophy of the hedge fund company

2. The investment portfolio
3. The investment options that you choose
4. How would your investment options improve the hedge funds performance
5. Any macroeconomic issues that you’d like to consider in making the investment options

The slides made shall be supported by an explanatory document in PDF not exceeding 5 pages.

* Note that you don’t necessarily have to use all of the RM100 million into your investment
options.
 HEDGE FUNDS PROFILE

1. MTC ASSET MANAGEMENT

CEO

Devan Linus founded MTC in 2012 alongside Aaron Yew and Donovan Ng. As Chief
Investment Officer for the Fund, Devan is responsible for the implementation of its
investment strategy. Prior to MTC, Devan managed the Kok family’s global equities
portfolio, applying the same investment principles as MTC applies today. Since 2007 to
2012, Devan has successfully delivered a return of 14% p.a. for the Kok family.

FUND PERFORMANCE

INVESTMENT PHILOSOPHY

MTC believes that investing is for the long term and consistent, steady returns are made by
investing in high-quality companies that will prove their worth over time.

a. Investing in What We Know

b. Investing Only When it is a Bargain
c. Investing with Patience & Ignoring Fear & Greed

2. BLACKROCK
CEO

Laurence D. Fink, also known as Larry Fink, is Founder, Chairman and Chief Executive Officer of
BlackRock, Inc. He and seven partners founded BlackRock in 1988, and under his leadership, the
firm has grown into a global leader in investment and technology solutions to help investors build
better financial futures. Today, BlackRock is trusted to manage more money than any other
investment firm in the world. Mr Fink has been named one of the "World's Greatest Leaders" by
Fortune, and Barron’s has named him one of the "World's Best CEOs" for 13 consecutive years.

INVESTMENT PHILOSOPHY

In January 2020, CEO of BlackRock announced that his firm has made a dramatic change in
investment philosophy and now will be emphasizing Environmental, Social, and Governance (ESG)
criteria to all their asset allocation and valuation decisions. It is BlackRock’s thesis that companies
that integrate sustainable values into their business models will outperform in the future. Therefore,
by analysing investments selection through the ESG lens, portfolios will as well.
Moreover, currently, BlackRock has seen the coronavirus crisis as a defining moment for ESG
(environmental, social and governance)-related investing. BlackRock’s investment conviction is that
sustainability-integrated portfolios can provide better risk-adjusted returns to investors. And with
the impact of sustainability on investment returns increasing, BlackRock believes that all investors
need to consider sustainability in their portfolios.

ASSETS UNDER MANAGEMENT

As at 31st March 2020, BlackRock had ended the first quarter of 2020 with $6.47 trillion in assets
under management, down from $7.43 trillion in the final quarter of 2019. The world’s biggest asset
manager, BlackRock, saw the capital it manages fall by almost $1 trillion in the first quarter as
investors pulled money out of its marquee funds. Another reason for this fall is that costs rose amid
a global economy hit by the coronavirus pandemic.

(https://ir.blackrock.com/financials/quarterly-results/default.aspx)

3. PERSHING SQUARE HOLDINGS

CEO
William Albert Ackman, also known as Bill Ackman, is the founder and CEO of Pershing Square
Capital Management, a hedge fund management company. Ackman is considered a contrarian
investor but he considers himself an activist investor.

ASSETS UNDER MANAGEMENT

As of 31st December 2019, Pershing has assets under management (AUM) of $5759.4 million.
However, as at 30th April 2020, Pershing’s assets under management had increased by 15% which
is to $6627.2 million.

(https://www.pershingsquareholdings.com/company-reports/monthly-portfolio-reports/)

INVESTMENT PHILOSOPHY

Bill Ackman is an activist investor. He buys the common stocks of public companies and pushes for
changes so that the market can realize the values of the companies. Ackman buys stocks trading at
a discount and sells when the companies reach their appraised value.

Ackman considers Warren Buffet a mentor and accordingly looks for solid companies with large
growth potential. So with Pershing Square, Pershing Square International and Pershing Square
Holdings (collectively, the core funds), he seeks to invest in typically eight to 12 core investments -
specifically, minority stakes in publicly traded companies. He does this because he believes:

● “There are a limited number of attractive investments available in the marketplace at any one
time.
● “Investing in a relatively modest number of attractive investments about which it has detailed
knowledge provides a better opportunity to deliver superior risk-adjusted returns when
compared with a large diversified portfolio of investments it can know less well.”

The firm generally sets no restrictions on the securities or other financial instruments it uses. It also
does not follow any set asset allocation model.

The firm is also willing to sell existing holdings even at a loss to invest in better ideas.
4. Davidson Kempner Capital Management

CEO

Anthony A. Yoseloff is Executive Managing Member and Chief Investment Officer at

Davidson Kempner Capital Management and manages the firm’s distressed investments
department. He received a J.D. from Columbia Law School and an M.B.A. from the
Columbia Graduate School of Business Administration in 1999. He earned an A.B., cum
laude, from the Woodrow Wilson School of Public and International Affairs at Princeton
University in 1996. Mr. Yoseloff serves on the Board of Trustees of Princeton University,
The New York Public Library and Leadership Enterprise for a Diverse America. Mr.
Yoseloff serves on the investment committee of The New York Public Library and is a
member of the Board of Directors of PRINCO, the investment manager of the Princeton
University endowment.

ASSETS UNDER MANAGEMENT

Davidson Kempner Capital Management is a hedge fund with discretionary assets under
management (AUM) of $35,867,423,623 (Form ADV from 2020-03-27). Their last reported
13F filing for Q1 2020 included $3,023,907,000 in managed 13F securities and a top 10
holdings concentration of 56.23%.

( https://fintel.io/i/davidson-kempner-capital-management-lp )

INVESTMENT PHILOSOPHY

Davidson Kempner believes strongly in using capital only in the top risk-adjusted investment
opportunities. The firm also utilizes several investment strategies, including:

● Distressed investing.
● Mergers/acquisition investing.
● Investing in long/short equities portfolios of securities.
● Investing in convertible and volatility arbitrage and corporate high-yield.
● Investment-grade bond investing.
 INVESTMENT OPTIONS
● There are 10 investment options given. Choose any of these investment options below you
deemed best for your investment portfolio.

● You may choose more than one investment option from the same category.

● The investment portfolio must consist of a minimum of 2 investment options.

A. Bonds

Stock Code VN160160 PZ180012 VZ140395

Issuer AEON MAHB

BANK MUAMALAT

Type Islamic Medium Term Conventional Bonds Islamic Long-Term Sukuk

Notes (Murabahah)

Coupon/Profit 5.80 6.65 5.75

Rate (%)

Frequency Semi-annual Semi-annual Semi-annual

Tenure (Years) 10 95 100

Rating A3 Unrated AA2

Yield (%) 5.70 7.80 5.66

Traded Price 101.74 103.60 107.32

Outstanding 250 Million 100 Million 1 Billion

amount
* Traded price is calculated based on the information available as at 29/05/2020.
B. Stocks

Criteria Option 4 Option 5 Option 6 Option 7

Company Name AXIATA IJM INARI AHMAD ZAKI

GROUP PLANTATIONS AMERTRON RESOURCES
BERHAD BERHAD BERHAD BERHAD

Stock Symbol & AXIATA (6888) IJMPLNT (2216) INARI (0166) AZRB (7078)
Code

Shariah Compliant Non-compliant Compliant Compliant

Last 4Q Quarter 31/03/20 31/12/19 31/03/20 31/12/19

Report

Market Capital 34842.00 1417.00 4833.00 134.530

(RM Million)

No. of Shares 9169.00 880.58 3243.00 597.912

(Million)

EPS (cent) 2.10 3.01 4.95 ?

P/E Ratio (cents) 180.95 57.14 30.47 ?

ROE (%) 5.42 1.97 13.29 ?

Dividend (cent) 9.500 2.000 4.400 1.000

Dividend Yield 2.50 1.24 2.95 4.44

(%)

Dividend Policy 30 0 0 0
(%)

NTA (RM) 1.700 1.530 0.368 0.714

* Market capitalisation is based on the share price as at 29/05/2020.

* Other financial information is based on the latest quarter report published.
 C. Unit Trust / Mutual Fund

Criteria Option 8: BIMB i Option 9: RHB US Option 10: Kenanga

Growth Fund Focus Equity Fund Growth Fund

Issuer BIMB Investment RHB Asset Kenanga Investors

Management Berhad Management Berhad Berhad

Asset Class Equity Balanced Equity

Net Asset Value RM 0.3376 RM 0.8922 RM 1.0439

Fund Size RM 17.62 Million RM 49.68 Million RM 1045.20 Million

5Year Cumulative 2.10% 2.15% 2.27%

Preference

Awards and ESG Asset Manager Best Equity Income Most Outstanding Unit
Recognition 2019, The Asset Triple (Malaysia) in 3, 5 and 10 Trust for 10 Years.
A Islamic Finance Years of Refinitiv
Awards. Lipper Fund Awards
2020.

Shariah/ Yes No Yes

Compliant

Annual Expense 1.50% 1.80% 1.50%

Ratio

Minimum Initial RM 100 RM 1000 RM 1000

Investment
 MARKING RUBRIC
CRITERIA MARKS
Introduction
● Nature and investment philosophy of the assigned company
● The clear objective being set 10
● Identification of investors

Analytical skills
● Thorough technical and fundamental analysis 20
● Appropriate calculation

Evaluation Skills
● Clearly justify the selection of investment options
● Clear explanation on the impact of taking investment 20
options

Judgement/Commercial Acumen
● A detailed explanation of other factors relevant to the
decision 10

Scepticism
● A concise risk management plan 10

Delivery
● Well-presented points
● Appropriate use of visual assistance 20
● Sufficient supporting evidence and appropriate reference

Bonus Mark
● Shows exceptional critical thinking on the issue given 10

TOTAL MARKS 100