Arc View Investment Limited is an investment management firm located in Hong Kong that focuses on investing in public and private companies across various sectors. The firm takes a long-term, value-oriented approach to investing and aims to generate attractive risk-adjusted returns for its clients. In this article, we will provide an overview of Arc View’s investment strategies, portfolio, and performance track record over the years. The key aspects we will cover include the types of investments Arc View focuses on, the industries and geographies it targets, the investment horizon and holding periods, and how its funds have performed. Understanding Arc View’s approach can give investors insights into its philosophy and process for generating investment returns. With multiple occurrences of investment and Arc View Investment Limited, this background sets the context for the detailed exploration in the following sections.
Arc View Focuses on Fundamental Analysis and Taking Concentrated Positions
One of the hallmarks of Arc View’s investment strategy is the emphasis on fundamental analysis and taking concentrated positions in high-conviction ideas. The investment team spends a significant amount of time analyzing companies through primary research such as speaking to management teams and industry experts. They focus on understanding the long-term drivers of a business and aim to invest in companies trading at discounts to intrinsic value. Arc View’s funds tend to be concentrated with 20-25 core positions that represent the team’s highest confidence ideas. The top 10 holdings often make up a substantial portion of the overall portfolio. This concentration demonstrates Arc View’s commitment to its investment theses and long holding periods for winners. The focus on fundamental research and concentration are key pillars of Arc View’s approach to investment.
Public and Private Investments Across Multiple Sectors and Geographies
Arc View invests in both public and private securities which provides for a broader opportunity set. On the public side, the firm invests primarily in equities but will also consider fixed income securities. In terms of private investments, the firm participates in late stage venture capital and growth equity rounds. In addition to securities selection, Arc View will make tactical asset allocation shifts between public and private markets depending on valuations and opportunity. In terms of sector focus, Arc View is sector agnostic but tends to gravitate towards certain areas including technology, consumer, healthcare, and financial services. The firm targets investments across multiple geographic regions with a focus on Asia Pacific. By combining public and private market exposure across sectors, Arc View can capitalize on a wide range of attractive opportunities.
Five to Ten Year Investment Horizon and Long Holding Periods
Given its long-term fundamental focus, Arc View’s investment horizon and holding periods are measured in years rather than months or quarters. The firm describes its ideal holding period as five to ten years. Arc View concentrates its best ideas in the portfolio with the intention of holding them for prolonged periods. In practice, the average holding period is five years or more for core positions. Arc View’s long-term view gives companies time to execute on their business plans and for the investment thesis to play out. The firm is able to look past short-term fluctuations and volatility in financial markets and business conditions. However, Arc View will sell positions if the long-term investment case deteriorates due to changes in industry dynamics, company competitive position, or management execution.
Strong Long Term Track Record Through Different Market Environments
Since its founding in 2002, Arc View has delivered strong investment performance across different market cycles. The Arc View Investment Partners Fund I had a net IRR of 15.3% from 2002 to 2011. Fund II generated a net IRR of 13.5% from 2010 to 2020. The performance translates to meaningful outperformance relative to common benchmarks over those long time horizons. Arc View was able to preserve capital during down markets such as the Global Financial Crisis and outperform in up markets. The firm has effectively executed its strategy of taking concentrated positions in high conviction investment ideas across public and private markets. Arc View’s strong long-term results demonstrate the success of its investment approach guided by fundamental analysis, concentration, and a multi-year time horizon.
In summary, Arc View Investment Limited utilizes a long-term, high conviction investing strategy focused on fundamental research. It concentrates its best ideas into 20-25 positions and holds them for 5-10 year time horizons. Arc View combines public and private market investments across sectors and regions, primarily Asia Pacific. The firm has delivered attractive net returns above benchmarks over multi-year periods, demonstrating successful execution of its investment philosophy and process.