FountainCap has a relentless focus on researching and understanding the dynamic changes of the Chinese economy. We read China not as a large homogenous country but a composition of 33 states (provinces), each with its own economics and demographics as well as its own cultural status. Having an in-depth understanding of the varying social and economic development factors within different tier cities in China not only can help validate the growth prospect of existing industry leaders but can also lead to the discovery of opportunities that are often not understood or not identified by the public. We employ a bottom-up approach in selecting stocks of quality companies with strong fundamentals that we can hold over the long run. All of these translate into an investment portfolio that is well positioned to capture China’s ongoing growth and transformation.



Philosophy & Process

 

"If you are not willing to own a stock for 10 years,  do not even think about owning it for 10 minutes."  - Warren Buffett

 

We believe one of the best ways to deliver sustainable long-term investment results for investors is to adopt an “active passive” approach to investment. In our view, indexation isn’t sufficient as a representation for a market as complex as that of China. In order to understand the nuances of the Chinese economy and, therefore, to identify and capture long-term investment opportunities, we believe an active bottom-up approach is needed. Upon investing in these companies, we believe short term trading provides the least added value to long-term results for investors. Therefore, we abide by the same long-term investment principle as quoted above. Adjusting for a rapidly growing economy like China, our typical holding period for a company is between 3 – 5 years or longer. 

In summary, our investment strategy and philosophy are built on the following principles:

  • Fundamental Research: The complexity and implication of China transformation can only be understood by thorough fundamental research.
  • Long-term Driven: Short term trading provides least value to long-term results. We do not time the market for most of investment decisions.
  • Bottom-up Stock Picking: We employ a bottom-up approach enhanced by our “backpack” grassroot research to generate value and portfolio appreciation.


Principles & Culture

Our success reflects the beliefs and values that we represent. We want to foster an environment for our people that cultivates intellectual honesty, teamwork, and commitment to the overall success of the firm. We aim to ensure our interests remain long-term and closely aligned with those of our investors. After all, it is only with the dedication of our people that we can best serve our investors and generate sustainable long-term returns.

Below are 5 FountainCap guiding principles that we adhere to:

1. Clients’ interests always come first.
We believe fiduciary relationships go beyond contractual obligations and should serve as the anchor in all our business decisions.

2. Integrity and honesty are requisite values of our people.
We believe only through upholding the highest ethical standards in everything we do can the firm survive and prosper. 

3. Fairness and transparency promote merits-based advancement.
We believe for the firm to be successful, we must be able to attract and retain talents in a highly competitive industry.

4. Teamwork at its best creates synergy.
We believe success can only be sustained through collective efforts. There is no room for any individual that jeopardizes the interests of the firm and its clients.

5. People and reputation are the company’s most valuable assets.
We believe the firm’s legacy is built upon an uncompromising adherence to the laws and ethical principles that govern us.

 



Our Team

The team at FountainCap is local by nature but global by nurture. Given the integration of the Chinese economy into international markets, it is more pertinent than ever that investing into China requires strong local knowledge supported by a global perspective. Our team has gained extensive China investment experiences through seven major capital market cycles over the past twenty six years. Not only do our associates hail from the top universities in the US, UK and China, but most of them are trained in renowned global financial institutions and have working experiences in both China and the west.

Led by veteran China investor, Frank Ding, our investment professionals are all sector/industry specialists with a combined China investment experience of over 60 years. We are dedicated in generating superior long-term investment returns through investing in equities that are benefiting from massive China transformation and growth and providing the best services to our clients.