Global Investments

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Competence

When Babcock & Brown Global Investments Ltd imploded in 2008 with $156M losses and sitting on $167M debts during the global financial crisis; ST Asset Management Ltd led by Boon Swan Foo was brought in to:

  • delink company from Babcock & Brown

  • reduce leverage and

  • to turnaround the company

As of FY21 Global Investments is debt.

The business is managed by a six members board and do not have employees or executive officers. 

Investment portfolio consist of:

  • Bank contingent convertibles

  • Listed equities

  • China domestic bonds

  • Cash & other net assets

  • Other bonds

  • Loan portfolio and securitisation assets

Breakdown of currency are: USD, SGD, RMB, HKD, Euro, AUD, others

Financial

Sources of income are from dividend, interest, asset sale or fair value through profit or loss and forex gain / loss.

The business had been profitable since 2010 starting from a low $6.6M to high $39M in 2017 averaging $19.5M over the past 12 years.

Note: In 2018, Asia Equities suffered a loss of $8.5M.

Dividend between 2017~2021 range from 1.3 ~ 0.8 cent per share.

Balance sheet is very healthy with total asset of $311M including $42M cash against $2M total liabilities. NTA per share have improved from 0.120 to 0.196 from 2012~2021.

Opiniion

Alternative assets investing is complex and highly specialised. The board have done a remarkable job in turning around the business. Asset have been increasing over the years while liabilities reduced to only $2M. 

 

Geopolitical and economic risk have increased in the past years, namely US - China trade relation, inflation and quantitative tightening, rising interest rate environment, Russia - Ukraine war and on-shoring or de-globalisation. 

GIL is a good dividend play, however caution is warranted.