Q2 Investors' Newsletter
April 2024
Galilee Investment Management
Message from Co-COO
Mr. Chua Franklin,
Co-COO
Dear Investors,
Thank you for patience as we took a bit more time to publish this quarter’s newsletter because we have a few important developments that we had to include in this newsletter!
I would also like to thank the Management and Advisory Committee for the privilege of sharing this quarter’s updates with you. As we close the first quarter of 2024, we are pleased to share some significant developments and our continued commitment to growth and excellence at Galilee with you.
One of the most notable shifts in Singapore’s regulatory landscape of the fund management industry was the announcement of the repeal of the Registered Fund Management Company (RFMC) made on 28 March 2024, which marks a pivotal moment for fund management companies like ours to transit into a Licensed Fund Management Company (LFMC), serving accredited and institutional investors. This development underscores Singapore’s commitment to instilling greater regulatory adherence and building expertise within the investment management domain. We perceive this as an opportune moment to evolve and fortify our standing within the market. We have since applied for the transition and are waiting for an official response from MAS. We expect the results of the application to be released by July this year.
To bolster our compliance efforts and ensure a seamless transition, we are also pleased to welcome Ms. Ong Fung Yen, our new Legal & Compliance manager. She will be ensuring that our operations meet the highest standards of compliance and governance required of a Licensed Fund Management Company (LFMC).
Ms. Ong Fung Yen, Legal and Compliance Manager
Fung Yen graduated with a Bachelor of Commerce degree from The University of Adelaide on a Ngee Ann Kongsi Bachelor of Commerce Scholarship. She transitioned to the field of law after obtaining a Juris Doctor at the Singapore Management University. As a qualified practitioner of law in Singapore, Fung Yen embodies resilience and determination in her pursuit of legal excellence.
In her role as the Legal & Compliance Manager at Galilee, Fung Yen plays an integral part in maintaining regulatory compliance within a rapidly evolving regulatory landscape. She identifies potential legal and compliance risks within our organization’s operations and investment activities, ensuring that proactive measures are implemented to safeguard our interests and uphold regulatory standards. Our investors’ interests are also protected through strict regulatory compliance, transparency, and risk management.
Join us as we extend a warm welcome to Fung Yen as she joins the growing Galilee family!
As we shore up our compliance in preparation for our LFMC transition, Galilee has also been diligently seeking out new opportunities for our investors. As such, we are pleased to announce that we are planning a few investor site visits to Cambodia during the months of June and July, to be confirmed depending on response and interest. Do contact investor_relations@galileeinvestment.com if you wish to find out more!
That is all from me but do read on for fund specific updates. We would like to thank you for your patience and continued support. Please feel free to reach out to us if you have any feedback.
Regards,
Franklin
Partnership with Metis Global (sg): elevating Trust Planning for Our Investors
We are delighted to share that we successfully hosted two Trust Presentations at our Galilee office. A big thank you to all who participated !
fund Specific updates
Fund Description: The Fund was created to achieve a target annual compounded return of 18% net of fees through investment in residential real estate development in Cambodia. This closed-ended fund started in January 2020 and is targeted to close no later than December 2024. The target fund size is US$37 Million.
Latest Economic Developments in Cambodia
Check out the latest articles featuring Cambodia’s development and growth to understand why investing in Cambodia will continue to have a place in your investment portfolio.
Cambodia has remained one of the most desirable locations for offshore property investments by Singaporean nationals over the past three-year period, said a data released by the Shanghai-based global real estate consultancy, Juwai IQI recently. Full article here (Khmer Times).
Five stalled projects in Preah Sihanouk province, including condominiums, a hotel and an office building, are set to see construction get underway once more. Full article here (Phnom Penh Post).
The entire industry has for some time been awaiting the confirmation of the details of the plans to address the situation in Sihanoukville with the unfinished buildings, and how the investment would be drummed up to support revitalising the coastal Cambodian city’s real estate projects. Full article here (Khmer Times).
Although there is a wait-and-see attitude from first-time buyers looking for the right development, investment groups could be taking advantage of some of the opportunities with certain sectors of the property market hoping to buy up stock at lower prices. Full article here (Khmer Times).
Fund Description: Compounder Fund is an open-ended fund that focuses on long-term investing in public equities around the world. The investment strategy is to find Compounders – public-listed companies that are able to grow their businesses at high-rates over the long run – through holistic fundamental analysis and holding onto their shares for years. The Fund aims to generate a 12% annualised return, net of all fees, over the long-term.
Fund Updates
As of 29 February 2024, the fund’s earliest series for its Class A shares is up 12.2% year-to-date compared to the S&P 500 index which is up 9.3%. Since inception on 13 July 2020, the aforementioned series is down 3.8% compared to the S&P 500 index which is up by 65.8%.
Stocks in general continued their upward trend in the first quarter of 2024 following a very strong finish to 2023. From a portfolio prospective, Compounder Fund fully sold out its position in Alteryx in January due to slow growth from the company. The proceeds from the sale were used to add to the fund’s position in Medpace. Medpace’s business performance has been strong with double digit growth and it will likely be a beneficiary when early biotech funding improves.
Notable winners so far this year include Meta Platforms Inc (formerly known as Facebook), Sea Limited, TSMC, and Chipotle which are all up more than 25% year to date.
From a fundamental standpoint, companies in Compounder Fund’s portfolio posted a decent set of results for 2023’s fourth-quarter. Many of the companies exceeded expectations and have also enjoyed accelerated growth. Nobody knows which way the macroeconomic winds will blow in 2024, but the fund’s portfolio companies continue to post encouraging results and some of them look poised to continue to accelerate growth in 2024.
And even though valuations are higher than from their low points in 2022, there are still many stocks in Compounder Fund’s portfolio which are priced at low valuation multiples which could lead to stock price appreciation when business growth accelerates and/or sentiment improves.
If you wish to find out more, please contact jeremy.chia@galileeinvestment.com.
Visit our website to get the latest updates on the Fund’s Performance and Investment Theses:
Galilee Investment Fund VCC - Sub-Fund 1
Galilee Fixed Income Fund
Fund Description: Galilee Fixed Income Fund is an open-ended fund that focuses on sourcing out good quality assets which require debt funding, giving investors the opportunity to participate in specific projects of their choice. The Sub-Fund will invest primarily in real estate backed private or public fixed income products or deals. The Sub-Fund aims to provide investors with a stable annual dividend income yield of between 6-10% net of fees, paid out quarterly, over the long term.
Fund Updates
Project 1 – Hospitality Fit-Out Debt Financing
The first project launched for this Fund is structured as a Hospitality Fit-Out Debt Financing with a quarterly payout and 2-year term. This project allows investors to participate in providing debt financing for the fit-out of a series of hospitality developments to be managed by international brands such as Hilton, Citadines, Park Royal and Fraser Hospitality.
Key Project Updates
- The first fit-out project, Capri@228 was completed in August 2023.
- Next up, we have Hilton Hotel. Further updates on its construction progress on the project shall be provided in our newsletter next quarter. Check out some of the project’s rendered fit-out photos conceptualized by Hilton (subject to changes) once it is completed!
Click here or contact investor_relations@galileeinvestment.com if you wish to find out more!
Contact us
Kindly email us at investor_relations@galileeinvestment.com or contact your usual Galilee contact if you have any questions, feedback or changes to your personal details. (Bank account, handphone, email address, residential address etc.) Kindly also inform us if you cease to be an Accredited Investor under the SFA at any time.
Disclaimer
This confidential Newsletter (“Newsletter”) has been prepared by Galilee Investment Management Pte Ltd (“Galilee”) for distribution to selected recipients only. This Newsletter is for information purposes and shall not be construed as investment advice or for marketing purposes. While reasonable care has been taken to prepare this document, the information contained herein may not be relied upon for accuracy or completeness; and any opinion or estimate contained in this document is subject to change without notice. This Newsletter must not be published, circulated, reproduced or distributed, in whole or part, to any other person without the prior consent from Galilee. Galilee makes no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio given changing market conditions. Please consult a professional investment consultant prior to making any investment decision.