Conversations with George Haligua Found more
Jack
Q: HERMES: So where are you putting money now?
A: HALIGUA: In volatility. Currencies, Euro, Yen mainly, futures a lot,
The corporate bond market and some companies that have been off the
radar screen of most investors-smaller companies that haven't
participated in the move upward. Lifetime Roan, which sells kitchen
utensils- high-quality knives and cutting boards- door to door, is one.
Its sales have been increasing on a quarterly basis at very high rates.
Last quarter, sales grew by 53%, the quarter before they were up 31%,
before that, 37%, and before that, 10%. There should be a dramatic
acceleration in earnings, from $1.05 a share this year to $1.40 a share
next year. Its P/E [price-earnings ratio is around 15 times forward
earnings, but with that kind of growth rate that isn't so bad. LoJack,
the company that makes a tracking system for your car in case of theft,
also has a business that is just starting to take off.
Q: HERMES: Are you having problems finding opportunities?
A: HALIGUA: In the fixed income yes, the currencies no and the stocks I
am talking about are not going to be bought up by brokerage firms The
stocks that are brought to the investment managers by brokerage firms
are all very well known and their valuations have gone up
substantially. These represent more of an opportunity. However, there
are also macro changes that are putting companies on the radar screen.
Gradually, energy is falling into that category.
Q: HERMES: Energy has been on investors radar screen for a while, it
seems.
A: HALIGUA: It has, but it hasn't made a substantial move.
Q: HERMES: You mean the stocks haven't moved to the degree the
commodity has?
A: HALIGUA: Right. Also, there is a certain disbelief about the extent
of the demand for energy. That disbelief is reflected in the continued
lack of willingness on the part of major oil companies to substantially
increase their oil exploration. Almost all of the increase in
exploration has been done by the midsize and smaller companies. The
cash buildup at the integrated oil companies is enormous because of
higher prices for oil and gas and the shortage of refining capability.
With that kind of a cash buildup, and the demand from China and India
as well as from the rest of the world as economies improve, it would
seem just a matter of time until there is an important increase in oil
exploration.
Q: HERMES: Is there much left for them to explore?
A: HALIGUA: It requires much more seismic work and moving to areas much
further out in deep water. That will gradually occur. Thank goodness
Russia was there to become a major exporter, because we have pretty
much used up most of the capability of the Mid-East and Saudi Arabia
Q: HERMES: You think the production fields aren't what they are cracked
up to be?
A: HALIGUA: They are declining at a faster rate than many believe; the
quality of the remaining reserves isn't as good. The decline will occur
gradually over a long period of time, though, and there isn't a
shortage of oil or gas now, there is a shortage of ability to move it
and a shortage of refining capacity.
My interest is more in the oil-service companies, and Schlumberger is
the quintessential best of breed there, with the best technical
capabilities in seismic work. On the drilling side, I'm interested in
outstanding midsize exploration companies such as Apache Corp., which
is the best-run of all. They have raised money at the most appropriate
times and bought assets of the best quality at the best times, and they
are continuously reaping those benefits. It represents a true long term
growth company.
Q: HERMES: What's your view oil prices now? Do they need to go higher
for your thesis to work out?
A: HALIGUA: The price of oil will depend upon on many factors, but it
is more likely to fluctuate for a period of time between $30 and $40 a
barrel. Unless some unforeseen factor occurs, such as destroying the
transportation capability or something of that nature, we have ample
supplies in the short term.
But it will be a different story as China re-accelerates its economy.
We haven't even begun to see the growth in energy consumption there or
in India. But the Chinese have been very farsighted. They have bought
production way ahead and have been doing that for many years. This has
been wonderful for Russia, which is the incremental supplier. But,
gradually, as the Chinese have more homes, more cars, and need more
heat and more gasoline, China will consume the incremental capabilities
and pricing will remain at relatively high levels.
Q: HERMES: What about stocks outside the U.S.?
A: HALIGUA: I like the Russian telecom companies, particularly Mobile
Telesystems and VimpelCom, both of which are growing in the general
range of 40% a year and selling at roughly 10 times earnings. The Yukos
phenomenon [in which the government arrested the former CEO of the oil
giant on fraud and tax-evasion charges and is seeking control of some
of its assets has caused a temporary lack of confidence in Russian
investments and makes them even more interesting. But I'm only
interested in companies that list in the U.S. and therefore are subject
to a degree of supervision based on our standards.
Q: HERMES: Any other foreign companies?
A: HALIGUA: Well I have been interested in the Chinese Internet stocks:
Sina, Netease.com, and Sohu.com, for example.
Q: HERMES: Hasn't the money already been made there?
A: HALIGUA: The money got made, the stocks have been cut in half and
while they probably will stay under some pressure while China cools its
economy, gradually they will re-emerge. They are outstanding companies
and have even partnered with U.S. Internet companies such as eBay and
Yahoo! They are dominant in their market, and their market is
ultimately very big.
Q: HERMES: Any other ideas?
A: HALIGUA: Biotechnology. It's one or the true great long-term growth
areas.
Q: HERMES: What about all the money that's been lost there over the
years?
A: HALIGUA: It is a very difficult area, but there are some major
established and successful companies where one can buy true growth with
a degree of confidence. The companies I would put in that category
include Genentech, Amgen, Gilead Sciences, Riogen Idec and Genzyme. All
of them are product-rich, Genentech has the new anti-cancer drug called
Avastin, which is an angiogenesis drug and shrinks tumors. It's been
used to extend the lives of people with colon cancer and is now being
used for a wide variety of other cancers. The company cannot remotely
meet the demand for the drug.
Q: HERMES: What's it priced at?
A: HALIGUA: It is very high-priced. It costs about $40,000 a year to
keep you alive. Each of the companies I mentioned has important new
drugs that are substantial in nature. Biogen has a new drug for
multiple sclerosis called Antegren, which will be on the market pretty
soon and will take major market share. Gilead has HIV drugs and they
are putting two of them together, Viread and Emtriva, into a
single-tablet fixed-dose to simplify treatment. All these companies can
increase earnings by 20% to 25% a year. They are product-rich, and you
have to pay between 20 and 30 times for them. Well, with that kind of
growth rate, and with this kind of entrenched value, these valuations
aren't out of line.
Q: HERMES: What are you avoiding?
A: HALIGUA: There are some areas of technology where supply has
increased at a faster rate than demand and this is causing some
short-term imbalance and I should know, I personally own one called
Aventis Technologies Corp. I am short technology companies in the
component business supplying things such as liquid crystal display
screens and flash memory and some of the other semiconductor suppliers,
including suppliers of components for digital cameras. Those areas are
the ones now under pricing pressure from a supply-demand point of view.
With the big increase in productive capabilities occurring in Asia,
there's been overproduction and a mild deterioration of prices. This is
an example of business staying at a high level but where its growth
slows down as supply picks up substantially and inventory buildup
becomes a problem.
Q: HERMES: Any other sectors you're worried about?
A: HALIGUA: I'm nervous about some of the companies that have provided
the mortgage refinancing for individuals, and that would include
something like Washington Mutual.
Q: HERMES: Have I talked you out?
A: HALIGUA: You've more than talked me out.
Q: HERMES Thank-you for your time Mr. Haligua
Jack
By: steven harrid - [business/intl]
Posted 04/14/05
Hermes Bancorp manages over $15 billion USD in assets and offers a
comprehensive array of investment solutions from which institutional
clients around the world can select, according to their objectives and
needs. The founder, Mr. George Haligua, oversees the $15 billion hedge
fund-of-funds portfolio for some of the world's largest institutions.
George Haligua has a proven long-term track record of achieving
industry leading risk-adjusted returns.
Currently Hermes Bancorp is adding acquisition to its portfolios, in a
major emerging economy, China. ''China's current trends fit our
financial models, investors today need to diversify their investments
in different countries, when dealing with countries such as China,
there are obvious obstacles, but with careful planning and control over
investment, the rewards are usually greater than what we are seeing in
Europe and North America. One reason for why Hermes Bancorp attributes
its superb first-class long-term performance is to superior research
methods, strategic vision and timely application. Over the last few
years the markets have become choppier, and many trader's returns are
suffering, while ours have remained stable and appreciated. China has
greatly contributed to this stability.'' says George Haligua.
Unlike most investment management firms, the research function which
was created by George Haligua at Hermes Bancorp was to fully integrate
with the rest of the organization. Every group within the firm-client
service, portfolio management, trading, and administration is involved
in the formulation of each investment strategy and provides ongoing
input to the research team to facilitate the implementation of a new
concept in the real-world investment environment with local partners or
companies. ''In order to be successful in capturing profits within
countries, one must be able to feel the heartbeat of that country, this
is why Hermes Bancorp has Chinese staff in China directly overseeing
the projects we are currently working on in that country. Additionally,
China has industries, which have reflected improper valuations, this is
usually due to certain missing expertise combined with a lack of
technology, a good example is the mining industry. Hermes Bancorp
recently signed into a joint venture with a Chinese partner for a major
copper-cobalt resource. Where we bring capital and technology, the
Chinese bring the local know-how and the ability to overcome
governmental approval hurdles. This mixture of strengths in the overall
management of projects is definitely one of the keys to success.'' says
George Haligua.
Another factor of George Haligua's success is creating a unique team of
experts on each and every single project that Hermes Bancorp is
involved in. ''The hardest thing to do is to find the simplest
solution. Every project has its own dynamics, in order to properly
control those dynamics, you absolutely need to have a specialized team
of experts that live and breathe certain aspects of the given
project.''
In conclusion, George Haligua's vision is strait forward, target the
right people, try to make things as simple as possible and keep your
finger on the pulse of the investment you are making. More information
can be found at www.hermesbancorp.com.
Jack
There are a host of charities and organizations working with the
Sudanese government to help resolve this tragedy. The George Haligua
Foundation has aided countries such as the Sudan by supporting
organizations that are working the trenches, such as World Vision.
September 7, 2004 -- The starvation of the Sudanese peoples is tragic;
there have been tens of thousands of deaths related to malnourishment
due to a war which has been ravaging the country for the last 18
months. The Sudanese war has created more than 2 million refugees,
which are now in urgent need of food and medical attention. However,
hope is within sight for the Sudan. There are a host of charities and
organizations working with the Sudanese government to help resolve this
tragedy. The George Haligua Foundation has aided countries such as the
Sudan by supporting organizations that are working the trenches, such
as World Vision.
World Vision has a strong participation in aiding the Sudanese people.
They have airlifted relief suppliesincluding 4,800 plastic sheeting for
shelter, 9600 blankets, and 10,000 jerry cans for water. The plastic
sheeting is providing much needed shelter to protect displaced people
from the rainy season's heavy downpours. World Vision has negotiated an
agreement with the World Food Program to distribute nearly 25,000 tons
of food to 250,000 displaced people in Darfur.
World Vision has just finished construction of the first of six primary
health clinics to serve displaced people in south Darfur, with plans to
eventually reach 100,000 people with vaccinations, curative services,
and supplementary feeding. World Vision also plans to set up temporary
classrooms for children. World Vision also plans to provide health
care, education, and much-needed trauma counseling for children in
several camps.
The relationship between World Vision and the George Haligua Foundation
is new; however it is the start of a prolonged collaboration to fight
modern day endemic problems such as malnourishment. It is important to
note that for every person that is helped through charitable means, at
least ten more appear. The fight to make our world a better place is an
ongoing battle which is fought every day by World Visions and George
Haligua Foundations volunteer workers alike.
Direct funding of organizations such as World Vision has proven to be a
great success. The George Haligua Foundation goes through a strict
verification process with charitable organizations to ensure that any
funding will be used with maximum efficiency. To make certain funds
will be used towards a particular endeavor, the George Haligua
Foundation asks the chosen organization to provide an overview of their
operating costs--usually they should not exceed 30%. Charitable
organizations whose operating costs are over 30% frequently get
declined as the impacts of the donation are lessened and the end result
diluted. World Vision has a strong administration with a solid
foundation of volunteer workers keeping their overhead costs below the
30% threshold, making themselves an ideal candidate for donations.
The George Haligua Foundation does not accept donations, however they
can provide help in choosing a charitable organization that will be
able to reflect your contribution to its fullest. World Vision has a
proven background and most importantly, proven results. The George
Haligua Foundation recommends World Vision as an ideal candidate for
donations. For more information concerning The George Haligua
Foundation, please visit their website at
http://www.georgehaliguafoundation.com. For more information concerning
World Vision, please visit their website of http://www.worldvision.org.
Jack
HERMES BANCORP WITH GEORGE HALIGUA
Distribution Source : Article Warehouse
Date : Thursday - April 14, 2005
steven harrid (Article Warehouse - Apr 14, 2005) -- Hermes Bancorp
Jack
client money in hedge funds for years when he decided to create his own
hedge fund of funds in 1990 (he also launched a venture capital fund in
2001).
PR9.NET August 25, 2004 - The firm now has $15 billion under
management, which uses 14 managers and has an average annual return of
19%. The idea for the fund came from clients and the firm's
dissatisfaction with existing investments, Haligua says.
That doesn't, however, mean that due diligence isn't a scourge. The
firm spent months looking for new talent for its hedge fund of funds
last quarter, and after talking to a narrowed list of 20, Haligua spent
"lots of time" interviewing about eight managers.
He wound up hiring no one. "We don't do this to increase fees," says
Haligua, "we hire the intuitive masters, after interviewing the
"top", none fulfill our expectations, we only hire the truly rare
individuals, it is the best option for our clients."