Uni-Asia Group Chief Financial Officer Lim Kai Ching explains how staying small and diversified has allowed the company to find a niche in shipping vessels and property investments.
Big may not be better when it comes to investing.
This is the belief of Mr. Lim Kai Ching, Group Chief Financial Officer (CFO) of Uni-Asia Group, an alternative investment company that has forged its specialty in niche assets within the property and shipping markets.
Its current portfolio includes residential properties in Japan, commercial and industrial buildings in Hong Kong, as well as ten wholly-owned dry bulk carriers and seven joint-investment bulk carriers.
"We are able to do many different things because of the experience we have and the lessons we have learnt,” explains Lim.
Establishing a footprint in Japan’s property market
Uni-Asia’s early beginnings are tied strongly to Japan, with the company’s four co-founders being all Japanese. Its subsidiary in Japan, Uni-Asia Capital (Japan) (UACJ) has a property asset management license in Japan and is based in Tokyo.
While Japan’s population has been declining, Tokyo’s population is increasing due to the inflow of Japanese professionals from other parts of Japan to Tokyo for work or study. As such, the firm focuses on its trademark small residential projects – the ALERO series in Tokyo, explains Lim
These are typically four to five-storey buildings with 10 to 30 units of studio or maisonette-type flats, popular with working singles or couples.
To develop the ALERO series, Uni-Asia would purchase suitable land in Tokyo close to train stations and other amenities, develop the projects, lease out, and sell for investment gain.
“We have learnt from experience [during the Japan property bubble], that it is sometimes better to take money off the table, rather than to hold these properties for rental yield and risk the property falling in value,” shares Lim.
Apart from the ALERO series, Uni-Asia has also been helping investors outside of Japan gain exposure to property investment in Japan. For instance, Uni-Asia has partnered with investors in Singapore and Hong Kong to purchase land in popular ski destinations such as Niseko and Furano in Hokkaido. Such investments could be developed in the future or be sold for gain.
Otherwise, it may be difficult for foreign investors to invest in Japan due to differences in regulations, tax laws, culture and language, shares Lim.
UACJ is able to help foreign investors with their property investment needs in Japan, as UACJ has a strong network of property related service providers including architects, contractors, accountants, brokers and so forth.
In addition, UACJ helps its clients to manage assets across the hospitality, healthcare, resort, and residential segments. UACJ is also able to help clients oversee the construction of property projects, and manage the asset following the completion of construction.
Such services are also offered to foreign investors outside of Japan who wish to invest in properties in Japan but may not have the time or resources to monitor the progress of their investments.
Finding opportunities in the shipping industry
Besides property investments, Uni-Asia has also captured opportunities in the field of shipping.
The company offers one-stop integrated shipping-related services for clients. Ship investors can approach them for ship investments and asset management services; ship operators can seek them out for ship chartering and management; and ship owners can look for them for finance arrangement, management and brokerage services.
Shipping is still the most efficient means of transport to move goods around the world, says Lim.
Uni-Asia differentiates itself by investing in handy-size dry bulk carriers, which are seen by the company to be more versatile as they can be deployed in shallower waters. As such, handy-size bulk carriers are able to reach ports that are less developed, which are common in transporting dry bulk such as logs.
Uni-Asia’s vessels also have their own cranes which can be used to load cargo in these less developed ports. According to Lim, the rates or prices of small handysize vessels tend to be less volatile, and the small handysize market is more liquid, as compared to their larger counterparts.
“There are definitely challenges facing the shipping industry right now, such as the uncertainties surrounding environmental regulations like the carbon tax. However, if we study the market well, there are opportunities for us to purchase the right shipping assets and grow our vessel portfolio,” says Lim.
Playing to its advantage
Having multiple diverse assets allows the firm to weigh out its options and take its time, explains Lim.
If Uni-Asia were to dispose of any of its assets, it will not be in a rush to try to bring in new assets. On the other hand, if a company only has a single class of assets, proceeds from disposals need to be quickly deployed in the same asset class to generate returns.
However, the price of such assets could be high which may make it a less opportune time to re-invest the disposal proceeds. With multiple asset classes, the proceeds from disposing of one asset class when asset prices are high can be deployed to another asset class with lower asset prices so as to catch the waves of the different asset classes.”
“In addition, as Uni-Asia is relatively small, it can be nimble and react to market conditions quickly. We can also serve certain segments of the market which may be neglected by bigger players but too big for smaller retail investors”, shares Lim.
Forging relationships with partners
When asked about how Uni-Asia’s culture differs from other companies, Lim says that the key lies in its “continuity and consistency”.
Many within the team are long-serving staff who have stayed in the company for years. Lim joined Uni-Asia in June 2011 and subsequently was appointed the group chief financial officer in 2015. He has 25 years of experience in areas including finance, accounting, risk management, investment, audit and investor relations.
There is a strong emphasis on Uni-Asia being seen as a partner to their investors as well.
“If we find an attractive investment opportunity, we do invite our partners to participate. We will bring investors to our sites, share our value insights, and assist translations of the contract agreements,” says Lim.
Uni-Asia invests its own capital into the projects with private investors. Should an investor wish to exit from the investment, Uni-Asia would buy over their shares.
“At the end of the day, the relationship we have with our network of investors is important. Yes, we want to make money but we also want to maintain the relationship,” explains Lim.
The dedication to building strong ties has resulted in repeat partners who approach them for different investment opportunities, be it in Hong Kong or Japan.
Uni-Asia has also been able to grow as a team because of the nurturing culture they’ve built, one that doesn’t rely on blame or finger-pointing, he adds. As a result, the company has earned the trust of its staff and partners.
“When you are too quick to point fingers whenever mistakes happen, you lose the chance for the staff to learn and contribute back to the organization in the future. Instead, we learn to respect each other’s professionalism and take responsibility as a collective organization. While we cannot avoid making mistakes, the company has a consistent and stringent decision-making process in place that allows our staff for taking calculated risks. People are thus happy to invest their time and their career in us because of these processes and attributes.”
About Uni-Asia Group Limited (SGX stock code: CHJ)
Uni-Asia Group Limited is an alternative investment group specialising in creating alternative investment opportunities and providing integrated services relating to such investments. The Group’s alternative investment targets are mainly handysize dry bulk ships and properties. The two main alternative asset classes the Group focuses on are Shipping and Property.
The company’s website is www.uni-asia.com
About kopi-C: the Company brew
kopi-C is a regular column by SGX Research in collaboration with Beansprout, a MAS-licensed investment advisory platform, that features C-level executives of leading companies listed on SGX. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.
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Toh Ee Ming
Toh Ee Ming is a freelance journalist and writer in Singapore.