In Edgefolio’s new ‘Exposure’ series, we’re catching up with our FundPortal clients to get their insight on fund marketing and the funds industry as a whole. We delve into the brands, the people, their investment strategies and their thoughts on how technology is disrupting hedge fund communications.
Please could you introduce yourself and tell us a bit about Kenno?
I moved to Singapore in 2014 to manage the Asian portfolio of a large Finnish family office. After several years of solid performance, we decided to transform the investment company into a fund management business. Upon receiving our Singapore licence, we then established a fund vehicle in Luxembourg. This structure allowed us to focus on European investors. Fast forward to 2022, we’re now a rapidly growing boutique fund management company. In fact, Kenno’s assets under management have reached the US$ 70 million mark, which is tremendously encouraging. To put this in perspective, since we started working with Edgefolio 18 months ago, our AUM has almost doubled. Our success has also allowed me to grow the team, which is now six strong. Three are based in Vietnam, where we have invested 95% of our assets, and the other three are located in Singapore.
How has the fund performed over the last few years?
The fund has performed consistently well, rising by over 68% in 2021. This record return made us number one in the Eurekahedge Long-Only Absolute Return Fund Index. When translated into annualised terms, our return at the end of July was approximately 21.6%! As an aside, I use FundPortal to track my own peer group of funds with a similar focus, and last month we were still number one.
What is your unique value proposition?
At a high level, we aim to deliver excess returns to our clients by focusing on publicly listed companies in Southeast Asia. We identify the most attractive stock market, and then build a portfolio of high-conviction positions. When you invest in markets like Vietnam, it’s also vital to have an on-the-ground presence. That’s why we have three team members based in Hanoi who attend over 160 meetings per year with various businesses and analysts. These visits allow us to understand a company’s operations and gauge the quality of their assets. More broadly, we can evaluate what’s happening in the wider economy. That’s the real value proposition – the fact that we have our finger on the pulse.
“When you invest in markets like Vietnam, it’s vital to have an on-the-ground presence.”
What made you decide to invest in Vietnam?
One of the lessons learned from our family office days is that Asia is incredibly diverse. When travelling around the region analysing companies, what struck us was the variation across different economies and their development. Therefore, to keep things focused, we decided to immerse ourselves in a maximum of two countries where the risk-return was superior in the region. As an active manager, our clients also expect us to be different. Once Vietnam was chosen as our core market, we deployed all our resources to identify around eight to 12 different names to include in the fund. We believe this highly-concentrated, localised approach adds real value, and helps us deliver robust long-term returns.
How do you attract new investors to the Vietnamese story?
We are working with our existing network in northern Europe and sharing our success story with as many people as possible. Vietnam has an impressive growth story, which attracts a lot of interest. It also helps that many potential investors are already researching the country, so they know the fundamentals. This lets us channel our energies into showcasing our portfolio companies and the uniqueness of our investment approach. Thanks to our hard work, new introductions are becoming easier.
People are discovering what we do and learning about our investment approach, so their minds are increasingly open. Alternatively, they may have read about opportunities in Vietnam without having found a way to participate in the market or identified a manager they would be comfortable investing with.
In this respect, FundPortal is a powerful tool, and we plan to add more content to the platform in the coming weeks. The platform features core information about Kenno, and our feedback from investor meetings will help us provide targeted insights for our clients and prospective partners. It has also been a pleasure to notice that while Kenno has been growing, so has Edgefolio.
FundPortal is today a much more advanced tool than it was when we began using it, and I look forward to seeing the product develop further.
How do you see digitisation impacting the asset management industry as a whole?
As the co-founder and CEO of a boutique fund management company, I see digitisation as a vital part of running the business, sharing our story, and attracting clients. The minimum fund size you need to start your own fund management company is rising because the industry hasn’t embraced technology in critical functions. Few managers are lucky enough to launch their fund at US$ 100 million, so they need to find ways to work smarter, not harder.
For an emerging manager like us, it doesn’t make sense to fly an investor relations team around the world to meet clients. We need to find other ways to provide our investors with the same high-touch reporting, while staying focused on our fund’s investments. FundPortal helps boost our market visibility and lets us channel our resources into delivering superior returns. Also, the CRM feature is essential as it enables us to monitor deals, securely manage our contacts, and assess the pipeline value.
There will always be a need for human interaction in the asset management industry, but the tools and channels used to facilitate that interaction will develop. I also believe that when the new generation of digitally-native investors enters the market, they will demand digital solutions. With FundPortal, Kenno can respond to that demand, and ensure our clients are happy with our returns and customer service.