Speaker 0:
Jane Andrews is founder and CIO at Bamboo Black. She joins me now. Would you tell us about bamboo

Speaker 1:
black? Yes, I launched Bamboo Black in July 2019 with Bembridge. Bembridge provide the infrastructure, the plumbing, so to speak. So the compliance, the operations, etcetera, that allow myself and the team to focus on what we really enjoy doing, which is managing money.

Speaker 1:
I have over 30 years experience of investing in Asia Pacific, and I have consciously built a team that's diverse in terms of backgrounds and experiences. We have a culture that is really collegiate. That really helps us discover some. Those smaller mid cap companies less well researched, most inefficient part of the market.

Speaker 1:
We have two strategies. One includes Japan. The other is an Asia, Japan or cap strategy. We typically have between 30 and 60% of the portfolio in smaller mid caps, and we define small midcap between 100 million and $10 billion. And where does

Speaker 0:
the name bamboo black come from? Yes,

Speaker 1:
When I founded Bamboo,

Speaker 1:
I wanted a name that was synonymous with Asia. Something that you find all over Asia and bamboo is that you will find that in any country in Asia, the other reason I like bamboo is the fact that it grows very quickly and it's also very strong. You see it

Speaker 1:
a scaffolding in many countries in Asia, and it's environmentally friendly. Plus, Edison, when he was looking to the filament for the light bulb, discovered that charred or blackened bamboo allowed the light bulb to last for over 1200 hours in some instances, so hence the name Bamboo Black. Can

Speaker 0:
you tell us a bit more about your investment philosophy and the objective of those

Speaker 1:
funds?

Speaker 1:
Yes, we believe that quality companies run by experience proven management teams with a focus on innovation have the best prospects for outperforming over a cycle and creating alpha.

Speaker 1:
These companies may be small mid cap, which is the most inefficient and less well research part of the market. We're looking to discover companies at the heart of change, solving real world challenges and build portfolios of differentiated holdings within risk parameters that maximise returns whilst preserving capital.

Speaker 1:
Uh,

Speaker 0:
can you talk us through the investment process in a bit more detail?

Speaker 1:
We expand the lens rather than philtre

Speaker 1:
the process through which we explore the ideas that we're looking for, we compare them to regional and industry peers.

Speaker 1:
We're looking for companies with quality characteristics.

Speaker 1:
So there are three main characteristics. Firstly, the franchise, the sustainability of the franchise. Does the company have a competitive edge? Has it got pricing power? Is it innovative?

Speaker 1:
Secondly, the management management that are transparent, that have a stake in the business that are focused on returns and expanding margins. There's a culture of good corporate governance. Good governance tends to lead to good E and good s and then third,

Speaker 1:
the balance sheet cash flow generation that can support innovation, R and D and investment. You mentioned

Speaker 0:
Asian smaller companies being on a discount to to to their main market. But what tends to happen to that discount as they grow? And how does that compare to the experience of, say, small cap investors in the US?

Speaker 1:
It It's very interesting that in Asia sub $1 billion market cap companies tend to trade at a significant discount, whereas in the US they trade at a premium

Speaker 1:
over time. In Asia, you find that companies, as they move up through the market cap spectrum

Speaker 1:
that they rerate and start to trade at more of a premium, whereas in the US the opposite is true and that some of those sub billion dollar companies actually de rate over time. So it is one of the reasons that we really like finding those smaller midcap companies, those less well researched companies that can really generate alpha over time.

Speaker 0:
There's a lot of Asia asset managers and boutiques out there. So why should investors consider bamboo black?

Speaker 1:
I think they should consider bamboo black because we are a boutique. We have a boutique culture that really fosters that creativity and curiosity. We have a very experienced team. I have over 30 years of experience of investing in Asian Pacific markets. I've been through many cycles. So this is not my first rodeo, so to speak.

Speaker 1:
And lastly, we have differentiated holdings. So we've got some really interesting, smaller midcaps that you're not gonna find in every portfolio out

Speaker 0:
there. We have to leave it there. Jane Andrews. Thank you. Thank you

Speaker 1:
very much. Mark