Value Approach

We evaluate the intrinsic value of a company by assessing its business, management, products & markets, competitive edges, assets, and cash flows. We conduct investments when there is “margin of safety”, where the price is at a significant discount to intrinsic value. From more than 1,700 publicly traded corporations in Korea, we research and select companies selling at substantial discounts to our estimate of intrinsic value. To minimize risks involved with the market or unexpected events which could adversely affect intrinsic values, we adhere to a policy of broad diversification within individual portfolios, with no one issue generally accounting for more than 3% to 5% of portfolio NAV.
Most investments in V&S portfolios have one or more of the following investment characteristics: low stock price in relation to book value, low price-to-earnings ratio, low price-to-cash-flow ratio, high level of dividend yield, purchases of a company’s own stock by the company’s management, and/or company share repurchases.


Special Situations Approach

V&S views that “special situations” approach is a part of “value” approach. There are particular circumstances involving a security that would compel to trade the security based on corporate events. Special situations sought by V&S research include tender offers, mergers and acquisitions, bankruptcy proceedings, and corporate restructurings. We also see a number of Korea specific events occurring, such as regulatory change, social pressure to improve corporate governance and change of large conglomerate structure. These events tend to motivate the sellers to dispose the assets in restricted time, which generally results in a discount to the price.


Disciplined Investment Approach

V&S believes emotional discipline is a critical asset for value oriented investors. Investment professionals at V&S are provided with environments which enable them to control their emotions and maintain with set criteria to make investment decisions. The mandate of our clients is to pursue long-term returns, which affords our investment professionals to focus on fundamentals of securities. In addition, our professionals are obligated to use rigid control parameters in buying and selling securities. The parameters include quantitative measures such as multiples, financial ratios, liquidity, etc. and qualitative measures such as management quality, market position, etc., all of which are derived from our philosophy and strategy.