Hong Kong Blue Chips Top Money Manager's List
Third Avenue Management is betting heavily on investments in Hong Kong according to President and CEO David Barse.
Forty percent of the firm's main fund are located in Hong Kong companies because some of the best and least known blue chips are there.
"They're fantastic companies with great balance sheets fantastic assets inside those balance sheets, management teams that are owners and not just operators of the business," Barse said. "In our view, currently, we think the growth opportunities in Hong Kong with their development lines into mainland China and other assets that they own and control are better than what the US economy's growth opportunities are."
Watch Barse's complete comments in the video below.
The firm's top 5 holdings include Cheung Kong Holdings, Henderson Land Development, Toyota Industries, POSCO, and The Bank of New York Mellon Corp. Third Avenue Management's Hong Kong holdings have gone up 76 percent since March.
Base said Third Avenue Management looks for companies that do not require access to capital as a way to build their businesses. Businesses that need access to capital are more likely to place themselves in a detrimental and dangerous position.
Barse advises the average investor to be cautious when buying into junk bonds.
"What we pride ourselves on at Third Avenue is being able to do deep-dive research, learning as much as we can about that company before we make an investment, and then knowing what the downside's going to be before the upside," Barse said.
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Third Avenue plans to launch a fund at the end of August that will focus mainly on credit, looking at both leverage loans and high yield bonds.
Barse is comforted that mega companies do not always have a clear handle on what the future holds.
Founded by veteran value investsor Martin J. Whitman in 1986, Third Avenue Management provides investment advisory services to many high-net worth clients and investment companies, among other corportations.