Philosophy: Creating value through Friendly Activism to deliver superior and sustainable long-term returns
Harmony Strategy:
The Fund finds undervalued and under-researched small to medium sized mainland Chinese companies and adds value to the companies through constructive ongoing advisory programs and strong interaction with the management and board.
The investment manager applies a fundamentals-driven, bottom-up approach to stock selection, focusing on high-growth, high-quality and under-reported investment opportunities that are attractively valued.
High growth potential is demonstrated by consistent and accelerating revenue and earnings growth, while quality is demonstrated by their corporate governance, management team and core competencies.
We believe that such an approach to stock selection, along with a disciplined approach to portfolio construction, a long-term investment horizon and most importantly, our value enhancement programs, will produce the best portfolio returns.
Harmony Principles:
Friendly activism: Harmony’s philosophy leverages DM Capital’s combination of strategic / consulting skills, entrepreneurial / operational experience, and investment talent, resulting in a private equity investment style and mentality applied to investing in public companies.
Value creation: Harmony works closely with portfolio companies to improve their corporate governance, strategy, operations, financial efficiency and shareholder communications.
Consultant approaches: A strong partnership team with senior ex-McKinsey & Co. partners based in China, Europe and US, coupled with an experienced analyst team on the ground in China (Shenzhen, Shanghai, Hong Kong and Beijing).
Business owner’s mentality: Harmony team takes a long term business partner’s mentality towards our portfolio companies, unlike other 99% fund which trade their stocks with no business interests. We view ourselves as part of the operating team and always think in the shoes of the Chairman, board, and the management team.
Concentration: Harmony targets 5-8 companies, 5 accounting for 80% of our total AUM.
Long-term holding: To capture the full value potential of a portfolio company, the holding period is typically 5+ years.
Ten-baggers: Harmony’s strategy justifies the potential to make 10x return by seeking to find undervalued companies with at least 100% upside on a base case and the potential to create 900% upside through value creation. This ability has been verified by our past track record of successful value creation cases.