Published in The Peak Malaysia March issue, 2018.
Devan Linus, CEO & Chief Investment Officer: Our origin story can be traced back to Malayan Traders & Co, a stockbroking firm in the 1960s that was owned by my late grandfather, Kok Ah Too. He practiced something he called value investing. Early on, he realised the most reliable method of growing wealth was to invest in blue chip companies that you could hold on to for the long term. I applied his investing principles to overseas stocks of my own to great success, and it’s the same principle we use in MTC Asset Management. I’ve always wanted to start a hedge fund and the initial discussion came about in 2011 between Aaron Yew and I, who was my university mate, and, soon, with Donovan Ng who was my colleague in Melbourne at the time.
Aaron Yew, Co-Founder: I’ve also always wanted to start a fund of my own but didn’t know exactly what kind I wanted to do. When Devan pitched the idea of value investing in blue chip stocks with returns of 10 to 15 per cent, this seemed like a wise approach and he already had a concrete strategy that he wanted to implement.
Donovan Ng, Deputy CEO: I joined them a bit later in 2015, but was always involved, playing an advisory role since they started in 2012. Keeping in touch with them over the years, it was evident that they had a very clear strategy, a solid blueprint for the business and armed with a team of very smart individuals.
Devan Linus: I said if you want to start a hedge fund, you need to do it in Malaysia. In Malaysia, it’s all about the banks. Not to knock them, but the bank is always thinking of its own agenda – getting everyone to bank with them.
Aaron Yew: A bank’s major source of revenue is giving out loans from the deposits they get. They will invariably sell products just to get people to invest, but it may not be the best product for absolute return, whereas a boutique hedge fund can look at the market and assess which areas to invest right now. Boutique hedge funds also generally tend to be owner-managed, so we’re investing our own money and have as much to lose as our clients.
Donovan Ng: We established MTC Asset Management to be a pioneer in the alternative hedge fund industry. In fact, we are one of the first new boutiques in the last 10 years to obtain a licence in Malaysia. When we started in 2012, we were only in our late 20s and people were asking: “How can I give you my money in the millions when you’re not even 30?” It was challenging, but not impossible. We were the solution, our products and in creating awareness of how we can add value for our clients. It’s a personalised service as we work closely with clients to understand their objectives in investing and what they want to achieve.
Aaron Yew: When you start a fund, it’s the same as starting a new business – you will have your ups and downs, and there’s never a year with no lows. The cycle is a natural part of the journey, but we’ve certainly had a good start by doing this when we’re young. We’ve been able to adapt a lot faster, willing to take the necessary risks and quickly learning from mistakes. Our age is a double-edged sword – some may feel more comfortable with an older private banker but, on the flipside, we’re able to hustle a lot more. In a sense, we have nothing to lose, so we can go all out to really make an impact.
Donovan Ng: Consistency naturally brings a following in the market and people are starting to realise that we can deliver and are here to stay. We’ve had great traction in January with an influx of new clients, while existing clients are increasing investments with us after a guaranteed 10 per cent in returns. We’re aiming for 15 and even 20 per cent in returns, depending on timing and luck.
Devan Linus: Since we began in 2012, we’ve managed a return of 170 per cent and it’s vital that we maintain this track record for the coming years. On the investing side, we’re doing our research and keeping a close eye on stocks in the market. On the business side, Aaron is now focusing on growing our clientele in ASEAN by starting in Singapore. It looks to be a solid year for us but, of course, no form of investment is a guarantee. Hence, we always go back to my grandfather’s philosophy of value investing. Whether the market is up or down, you should never stop investing.