Investors Stephen Fisher Published 4 months ago on January 8, 2018 By Callum Laing Share Tweet Stephen Fisher takes a non-traditional view on investment. What’s your story? I am currently Principal and CIO of First Degree Global Asset Management Pte Ltd in Singapore. Prior to that I worked for JP Morgan Asset Management for 18 years where I was Regional Head for Fixed Income Product Asia-Pacific. I completed a PhD in Finance in 1992 and have been in research and portfolio management ever since What is your involvement with Investment? Finance is in my blood. I started investing at the age of 7 years, spent my school vacations at the Stock Exchange trading for my personal account and decided to study the science of investing in order to know as much about the field as I could. I spent my time at JPMorgan Asset Management trying to introduce modern methods into a traditional investment process. In 2011, my partners and I decided to start our own firm to pursue a non-traditional strategy that is truly unique. How did that come about? Non-traditional investing is quantitatively rigorous and I have been researching what determines the ‘risk premium’ for 30 years. The Global Financial Crisis was misinterpreted by traditional investors as driven by default risk. Our non-traditional view focused on investors’ attitude towards taking risk – this is called ‘risk-aversion.’ Traditional investors during the GFC sold out cheaply since they feared economic collapse. Our non-traditional approach bought cheap assets instead by providing liquidity to an increasingly risk-averse market. Hindsight favours our interpretation. We set up First Degree in 2011 to offer this strategy to the broader investment market. What are some of the key things you have learnt about Investing? The PhD taught me that most of what we observe in financial markets, perhaps 90%, we don’t really understand. I am constantly amused by the newspapers and commentators who try to explain every market move somehow rather than just admitting that ‘…we don’t know…’ Noise, or market randomness, is all around us which makes investing extremely difficult. The corollary is, that if you can find a systematic, structural pattern within the markets then you can make a lot of money. What mistakes do you see less experienced investors making? Inexperienced investors often think that investing is easy and just start buying or selling stuff without a plan. Would you build a house without a plan? Inexperienced investors have a gung-ho attitude that inevitably gets them into a small number of concentrated positions, taking unnecessary risks for no return. By plan I mean you need to start with an overall strategic objective and then allow limited tactical deviations. The strategic allocation to the various asset classes is critical since this determines 95% of the long run return. Tactical trading attempts to identify ‘alpha’. Alpha is uncorrelated sources of return which are very difficult to find. I would recommend most investors not to try to make alpha. Experienced investors understand that making alpha is hard, that it requires patience and a niche, and that every little basis point earned is sacred. What mistakes do you see Entrepreneurs making? Entrepreneurs underestimate the value of distribution. It’s one thing to have a great product but it’s another thing to find customers and sell it. Distribution strategies need to be factored in and pursued from day one. Generating cash asap will keep you in the game. What’s the best piece of advice you ever received? My first boss at JPMorgan in New York dispatched me off to Australia with the advice “…take a few risks.” What advice would you give to those seeking funding? Focus on what you have done rather than what you want to do. Proof statements are worth much more than business plans and wish-lists. Who inspires you? Shane Warne – the greatest spin bowler of all time and a radical, rebellious, anti-establishmentarian. What have you just learnt recently that blew you away? Apparently, the most commonly used technique in Artificial Intelligence is linear regression!!! This method has been around for centuries and it means I have been using AI all my life without even knowing it! It’s great to see that statistical methods are now achieving broad acceptance and adoption in our everyday life. It also means that the term ‘Artificial Intelligence’ is a great misnomer – there is nothing ‘artificial’ nor ‘intelligent’ about linear regression (nor any of the other techniques used in AI). The AI-craze is largely marketing hype. What business book do you recommend the most? “A non-random walk down Wall Street” by Lo and MacKinlay is my favourite finance book since it sets out the foundations for active decision making. This is a modern response to Bert Malkiel’s “A random walk down Wall Street” that was critical of all active strategies. The point of Lo and MacKinlays’ work is that financial markets display a much richer statistical structure than the simple tests undertaken by the pioneers of modern finance would have us believe. This can be exploited for profit. Shameless plug for your business/organisation: First Degree Global Asset Management offers a truly unique, long-horizon investment strategy which has performed consistently for over 8 years. We exploit the well established phenomenon that forecasts power for the risk-premium using observable market variables is increasing in the time horizon. First Degree also holds a Capital Markets Services licence issued by the Monetary Authority of Singapore and offers a licensing platform for fund managers who seek to locate their operations in Singapore. How can people connect with you? Website: www.firstdegree.asia Email: [email protected] Phone: +65 9841 2002 Social Media profiles? My blog: http://www.firstdegree.asia/the-first-degree-view Investing videos: https://www.youtube.com/channel/UCFsYzq3Oq9VYHr2-YI76W6Q Google search “stephen fisher first degree” — This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected] Related Topics:asiaasianentrepreneurAustraliabusinesscustomersentrepreneursfinanceFocusfundinginvestinginvestmentinvestorslifeMarketingmemistakessingaporeStoryvalue Continue Reading You may like Will Financial Liberalisation Trigger a Crisis in China? Georges Tchokoua Women on Top in Tech – Chrissa McFarlane, Founder and CEO of Patientory Why Angel Investors are Shaking Up the Global Startup Scene Emmanuelle Norchet Myths & Facts about Entrepreneurship Investors Georges Tchokoua Published 8 hours ago on April 25, 2018 By Callum Laing Georges Tchokoua is connecting Africa’s fastest-growing entrepreneurs to global investors. What’s your story? My background is in statistical finance. I spent the early years of my career working in banking. After college in Paris, I started as a currency trader in London. After I graduated, I moved on to quantitative equity trading in New York, before going back to work as a financial engineer in London. I then decided to return to Africa to contribute to the economic development of the continent. After years spent in Morocco and in Cameroon, my home country, I realized, the majority of professionals are trained to be good employees, but there are not enough companies and jobs to absorb all these employees. I then went on to discover that, those venturing into entrepreneurship and innovation have limited access to coaching, mentoring, networking and financial resources. Upon relocating to New York, I started Africa Rising Invest. Our mission is to tap into the international marketplace from New York, in order to help unlock the entrepreneurial ecosystem in Sub Saharan Africa, and connecting the continent’s fastest-growing entrepreneurs to investors, globally. What is your involvement with Investment? Access to early-stage investment is still mystified in many Sub Saharan African countries. Though widely recognized as the main drivers of economic growth, innovation and job creation, SMEs in many cases still remain helpless when it comes to accessing finance. They are sometimes compelled to borrow short-term (3-5 years) at 15-20% from local banks or 25-30% from microfinance institutions. Many can’t meet the collateral requirements of local financial institutions. Here is my message to SMEs: You have other options. I recently led a kick-off meeting between an SME credit fund and a West African manufacturer of plastic products looking to raise capital to scale up. In the same vein, we have signed MoUs with various institutions interested in investing in African SMEs. Finally, I am also an expert consultant with the United Nations Economic Commission for Africa (UNECA) for the capacity building program (including how to raise cheap capital to finance growth and the development of local content in the extractive sector), currently being implemented in five pilot countries. How did that come about? My tenure in Africa was a wake-up call. Over 95% of Africa’s economy is driven by SMEs and entrepreneurs. However, there are only 29 exchanges on the continent, representing 38 (out of 54) nation’s’ capital markets. Access to early-stage investments is nonexistent in most countries. Therefore entrepreneurs face many funding gaps during their journey. With few crowdfunding platforms, nascent incubation and acceleration centers and almost no technoparks, many are left over-relying on government grants. But these grants are limited. The amount of money in world capital markets are virtually unlimited. Thus, my partners and I founded Africa Rising Invest to connect entrepreneurs from Africa to investors from anywhere in the world. We hope to make it easier for young techies in Silicon Mountain (“Africa’s next tech hub”) in Buea and Cameroon for example, to seamlessly tap into resources coming from Boston or Singapore. What are some of the key things you have learnt about Investing? Humility is extremely important. Investing in general, and investing in startups in particular, is a continuous learning process. It’s very tempting to overestimate your startup selection skills and think you have a special touch. But remember, technologies evolve much faster than feedback loops in venture capital. Artisanal gold mining – Shire, Northern Ethiopia What mistakes do you see less experienced investors making? Many less experienced investors expect a quick return based on good looking business plans forecasting profitable exits within 3-4 years. But behind every startup failure, there are good looking slides and spreadsheets. The reality is usually different. Angel investment is a long-term commitment. Some less experienced investors invest in early stages with no additional capital for follow-on rounds. As the startup expands, it will require more capital. By participating in the subsequent rounds, it’s an opportunity to set the company valuation. Otherwise, as an early investor you will be diluted and end up in a position too weak to control the terms of the deal. What mistakes do you see Entrepreneurs making? Most entrepreneurs tend to think VCs invest in technology. Wrong. VCs invest in businesses and people they believe can deliver; they don’t invest in ideas and technologies. Your technology is only one of many critical elements required to build a successful business. They tend to focus on what maximizes their ownership more than the drivers of enterprise value: Valuation, not your percentage of ownership is everything. You will have to be diluted if you want to raise capital. What’s the best piece of advice you ever received? Remember the last time you were preparing a presentation to speak before an audience. How long did you devote to polishing your body language and refining your voice as opposed to perfecting the words? Did you know, 55% of the meaning, people take away from any communication is based on body language, 38% on voice and only 7% on the actual words spoken? Mastering your communication skills, especially the three Vs of communication: Visual (what people see), Vocal (how it sounds), and Verbal (the actual words spoken) is key. To echo the President Gerald R. Ford, “If I went back to college again, I’d concentrate on two areas: Learning to write and to speak before an audience. Nothing in life is more important than the ability to communicate effectively.” What advice would you give to those seeking funding? Fundraising is a complicated process. Have a plan, arm yourself. Be open to listen and adjust. Invest in your financial education. Research and diligence of your target investors, just like they diligently research you. Summarise your info memo or your business plan in: (i) a 10-15 page presentation, (ii) a one pager, and (iii) a 2-3 minute elevator pitch. Investors usually don’t have long attention spans. It takes time and resources to read a 50 page business plan. You may not need it. Who inspires you? Tony Elumelu, a Nigerian economist, entrepreneur and philanthropist. He is the Chairman of Heirs Holdings, the United Bank for Africa (UBA), Transcorp and founder of The Tony Elumelu Foundation. The Foundation’s mission is to drive Africa’s economic development by enhancing the competitiveness of its private sector. As a premier pan-African-focused not-for-profit institution, the Foundation is dedicated to the promotion and celebration of entrepreneurship and excellence in business leadership across the continent, with initiatives such as The Tony Elumelu Entrepreneurship Programme (TEEP). I still vividly remember what he told me during the African Development Forum in Casablanca, Morocco last year: “African private sector has to be the generator of the continent’s economic development.” What have you just learnt recently that blew you away? The concept of agglomeration: This is a unique type of collaboration where a group of SMEs from the same or similar industries can join forces and list publicly on a global exchange. It is a huge opportunity for small businesses to grow faster through using the public markets. As a “co-operative of entrepreneurs,” it is a unique innovation that can be leveraged by African SMEs to leapfrog their development curve. It can be extended to lending, microfinance, nano finance and more. Cooperation and collaboration, not competition is a crucial concept in how we download and redistribute the limited financial resources available in this world. I am eagerly looking to source potential candidates on the African continent. What business book do you recommend the most? “From Business Cards to Business Relationships: Personal Branding and Profitable Networking” by Allison Graham. It is well known that your network is your net worth. Most professionals (including entrepreneurs) are usually not well equipped to take advantage of profitable networking. The whole process of attending events, getting business cards and building successful business relationships is an art, which can be intimidating if not mastered. It is almost never taught in schools. But how do you build that network? This book teaches you the practical way of realising your dreams by effectively connecting with the right people, at the right time. Shameless plug for your business/organisation: We are committed to helping the next generation of African entrepreneurs to access global finance and to scale their business to realise their vision. We structure innovative financial instruments suitable to our global network of investors. Sub-Saharan Africa is our market. The global financial marketplace is our capital reservoir. We are sector agnostic. Examples of startups we assist include the multi-award-winning EduAir (Formerly Kwiizi): An innovative solution designed to offer access to high quality digital education to schools and universities where there is no internet connection. The solution designs portable and open media libraries in the form of Boxes, giving access to a heap of educational content and offering an integrated communication system where learners can make video calls within the local network deployed by the Box. How can people connect with you? Website: www.africarisinginvest.com Email 1: [email protected] Email 2: [email protected] Social Media profiles? LinkedIn: www.linkedin.com/in/georges-tchokoua — This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected] Continue Reading Investors Emmanuelle Norchet Published 1 day ago on April 24, 2018 By Callum Laing Emmanuelle Norchet works with Golden Equator Capital. Her focus is on technology investments across the southeast region in the online travel, media and entertainment, digital health and financial tech sectors. What’s your story? I am currently working as an investment professional with Golden Equator Capital, a private equity and venture capital fund manager, with a strong focus on technology, headquartered in Singapore. I joined the firm to look at technology investments across the Southeast Asia region, with a focus and interest for sectors such as online travel, media and entertainment, digital health and financial technology. The firm currently has 11 investments that are active across 2 technology funds. Our portfolio can be found here: https://www.goldenequatorcapital.com/portfolio-2/. Prior to joining Golden Equator Capital, I worked with Nest, an early venture capital firm focusing on B2B technology plays in sectors such as healthcare, financial services, automotive and insurance. In my early days at Nest, I gained operational experience acting as general manager for Investable.vc, a first-to-market equity crowdfunding platform in Hong Kong set up to help early stage companies get access to financing through a community of over 800+ accredited investors and subsidiary of the Nest Group. I started my career working at a Chinese law firm in the field of inbound and outbound direct investments. I hold a Bachelor of Law, a MSc in Finance and I have been admitted to the Bar of Quebec, Canada. What is your involvement with Investment? As part of the investment team, I am involved with sourcing, identifying new investment themes, due diligence on new potential investments, presenting those opportunities to our investment committee, and finally working closely with portfolio companies to help them with their expansion strategy, corporate partnerships, customer acquisition and fundraising post-investment. How did that come about? After working with a startup and an early-stage venture firm, it made sense for me to move to Golden Equator Capital and focus on the technology sector in the Southeast Asian region. It is the right timing to focus on the region as we are starting to see more successful companies raising larger rounds from international players such as KKR, Expedia, JD.com and Alibaba. What are some of the key things you have learnt about Investing? There will always be some risks and some hurdles along the road, but ultimately, you have to believe in the team you are investing in and their ability to adapt as they continue to grow the business. As the technology sector is evolving quickly, our founders also need to have the ability and drive to move fast and adapt to the new market needs. A clear vision and good synergy between the founding team is important. What mistakes do you see less experienced investors making? They have usually seen enough companies, founders and business models to be able to see the big picture, trust their instincts and not doubt their decisions. What mistakes do you see Entrepreneurs making? One of the biggest ones that I’ve observed with early stage companies is for the founding team to focus or spend too much time on fundraising, resulting in less attention and focus on business and product development. The other mistakes would be the lack of focus, inability to delegate and building a clear organisational structure, resulting in the inability to do one thing well and affecting the execution. What’s the best piece of advice you ever received? As cliche as it sounds, I would go for, “focus on what you can control.” What advice would you give to those seeking funding? Don’t use buzzwords in your deck or presentations Be clear about the vision and the focus of the company Keep presentations short and to the point, leave most of the time for Q&As Enquire about the fund mandate to ensure alignment (geography, sector, stage) Don’t focus too much on the valuation in the early days Speak to the portfolio companies of your potential investors to better understand their personal experience working with them Who inspires you? Many of the local entrepreneurs that have managed to build amazing companies from scratch. Some examples are: Ching Tse-Tseng, founder and CEO of Vault Dragon Joseph Phua, founder and CEO of M17 Entertainment Lingga Madu, founder and CEO of Sale Stock Ethan Lin, founder and CEO of Klook Rosaline Chow Koo, founder and CEO of CXA What have you just learnt recently that blew you away? All of the challenges that JD.com had in their early days to get their company off the ground. I would recommend the book, “The JD.com Story.’ What business book do you recommend the most? The one I mention above and also, some other interesting reads are: https://www.amazon.com/Hard-Thing-About-Things-Building/dp/0062273205 https://www.principles.com/ https://www.amazon.com/How-Create-Mind-Thought-Revealed/dp/0143124048/ref=sr_1_2?s=books&ie=UTF8&qid=1519272960&sr=1-2&refinements=p_lbr_one_browse-bin%3ARay+Kurzweil Shameless plug for your business/organisation: If your company is looking to join our business club at Spectrum (https://www.spectrum.global/), please contact [email protected]. If you are a startup at the Series A or B stage in the region, please feel free to contact us at [email protected] How can people connect with you? [email protected] or [email protected] Social Media profiles? https://www.linkedin.com/in/emmanuelle-norchet-b2001ba/ — This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected] Continue Reading Latest Popular Entrepreneurship7 hours ago Will Financial Liberalisation Trigger a Crisis in China? Investors8 hours ago Georges Tchokoua Entrepreneurship18 hours ago Women on Top in Tech – Chrissa McFarlane, Founder and CEO of Patientory Entrepreneurship1 day ago Why Angel Investors are Shaking Up the Global Startup Scene Investors1 day ago Emmanuelle Norchet Entrepreneurship3 weeks ago Women on Top in Tech – Melissa C. 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