Wed, Sep 17, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Asia Pacific Intelligence

The view from Thailand: Niche and beating Warren - Thai focus works for Quest's Doug Barnett

Monday, October 29, 2012

Doug Barnett

Doug Barnett, president of Quest Management Inc, is having another great year. He has just won another award, the World Finance, Best Asia Pacific Long/Short Equity Fund over 2012 award for his Thai Focused Equity and his Thai fund is up 35% so far in 2012.

Barnett has enjoyed 22, nearly 23, years of investing in Thailand and achieved returns that have put him ahead of Warren Buffett's Berkshire Hathaway. Over the last 22 years, Quest has achieved IRR of 16.7% against Buffett's 14.7%, while over 14.7 years, Quest gained 15% against Buffett's 7.3%.

However, Barnett knows his place. His $200m fund is, as he says in an interview with Asia Pacific Intelligence, big for Thailand where the Thai market cap is $200bn (the size of a good sized US company) but small globally. His slogan is: "If you have $1 billion to invest, you have to go with Warren. If you have $100,000 to $20 million to invest, you should invest in the Thai Focused Equity Fund".

Interviewed on Opalesque TV in May 2011, at the time Barnett was celebrating achieving a 3111% gain in value and billing himself as the hedge fund for other hedge fund managers among who have included Julian Robertson and George Soros. "The fund is only available outside of Thailand because of local marketing rules. "It is mostly high net worth individuals and the personal accounts of other hedge fund managers" he says with 35-40 out of his 110 investors representing hedge fund managers.

Research is fundamental. "We visit a lot of companies and read a lot of stuff on Bloomberg, we research and screen historical numbers and I have been here a long time so I have probably visited every Thai company big enough to invest in" he says.

This is fundamental bottom up investing in a niche market. "There's a limit to what you can do in Thailand with our strategy" Barnett says. "Liquidity limits hit at $200-300m so it is a very focussed fund in which we make large bets on things we think are good."

For diversification across his business, Barnett is launching two new funds, one pan Asia excluding Japan which has $6m of the manager's own capital under management. "Pan Asia is a long/short fund just like the Thai fund but most of the positive returns come from the longs and the volatility dampening comes from the shorts" Barnett explains.

The manager of the new fund is Sergej Belozorov, who had six years of experience investing pan Asia and has worked with Barnett on the Thai fund. The Pan Asia fund launch was reported on in Opalesque. This new fund aims to beat the MSCI Asia ex-Japan index by 10%.

"We are experimenting with a new strategy since the beginning of this year" Barnett says. "Using mechanical stop losses for when we hit stocks that go against us." The second new fund is Asia including Japan and this fund, seeded with $4m of in-house money is up 12-14% year to date, beating the MSCI Asia including Japan index by 6-7%.

In the Asian funds all the stocks we are investing in have huge liquidity and market caps - we are trying to do something scalable and the stocks that we invest in trade $10-20m dollars a day. We could easily go up to $500m."

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
Asia Pacific Intelligence
Asia Pacific Intelligence
Asia Pacific Intelligence
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  2. Investors looking at other sources for hedge fund-like returns[more]

    Komfie Manalo, Opalesque Asia: Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to

  3. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Opalesque Exclusive: Old Hill Partners launches specialty finance fund[more]

    Bailey McCann, Opalesque New York: Asset-backed lending is starting to heat up again after a prolonged credit squeeze. The Financial Times reports that a record £18.9bn was borrowed from asset-based lenders in the three months to the end of June. Much of this lending is driven by advanc