What is the difference between Peter Partnership Fund and other funds?

1. You, the investor, gets paid before the manager(s)
   The fund manager only gets paid on performance fee, and nothing else. Also, the manager only earns performance fees when the fund’s return is more than 6% annualised.
2. We eat our own cooking
   The fund manager’s family invested their almost all their net worth in it.
   (My wife and I will have virtually our entire net worth invested the same way your money is managed. On top of that, my mother-in-law, father-in-law, sister-in-law, sister, brother-in-law, father and mother invest a significant portion of their net worth (more than 95%) in the fund as well)
3. The fund manager does not believe in forecasting (the market’s direction, interest rates, economy, etc.)

Since we do not believe any investors can successfully forecast the market’s direction (other than by luck), we simply attempt to buy more when prices get lower and trim down our holdings when prices goes higher.

Why does Peter Partnership Fund exist?
Problem: We believe most of the fund managers overcharge in terms of fees, and worst, the returns most of these fund managers generate are below what you can earn by just buying a low-cost index fund like Vanguard.
Do check out why Vanguard outperforms more than 90% of their peer averages over the past 10 years. Also, do check out Warren Buffett’s Letters to Berkshire Shareholders in 2016 (page 20 to page 23, under the sub heading “The Bet”. Quoting Buffett, he says: “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients”).

Alignment of interest and Solutions: We believe this fund would be an ideal Investment Vehicle for most people as we aim not only to align our financial interest together with our investors, but we believe we should be able to outperform the S&P 500 Index over three years or longer. An exception to the latter statement would be three years covering speculative explosion in a bull market.

Interest/ Passion: Quoting Buffett, he says “You really should take a job that if you were independently wealthy that would be the job you would take”.
I was lucky to have found a job which I’m passionate about, pays well, and helps my investors to be better off financially.

Is there a risk where Peter Partnership can run away with Investor’s money?
Not at all.

Your money and your stocks will be in a pool of funds under the care of Amicorp Trustees (Singapore) Limited. We can’t withdraw your money or your stocks– we can only issue instructions to buy/sell. Reporting and valuation is done by Intertrust Fund Services, part of the Intertrust Group who employs 4,000 staff based in 30 jurisdictions globally to provide world-leading, specialized administration services. They make sure all subscriptions/redemptions and computation of NAVs, number of shares and performance fees are done accurately. The fund auditor is Baker Tilly Singapore – it audits the fund to make sure that everything is fit and proper.

The funds’ bank and brokerage account name is “Amicorp Trustees (S) Ltd as Trustee of Peter Partnership Fund”, and it requires both Intertrust Fund Services and Amicorp Trustees (Singapore) Ltd approval before the money is released to any party. They are the co-signatories of the fund’s bank accounts, and not Peter Partnership.

While we the fund manager knows that we won’t run away with the investor’s money, the structure above goes a level further. It makes sure that we can’t, which is even better.

To know more about our main service providers, please click the links below.

1. Trustee and Custodian: Amicorp, through their Singapore office, AMICORP TRUSTEES (SINGAPORE) LIMITED. They hold Trust Business License in Singapore by MAS
2. Fund Administrator & registrar: Intertrust Fund Services, through their Singapore office, Intertrust Fund Services (Singapore) Pte Ltd.
3. Bank: DBS Bank, Singapore
4. Brokerage Firm: Interactive Brokers. They are a member NYSE – FINRA – SIPC and regulated by the US Securities and Exchange Commission and the Commodity Futures Trading Commission.
5. Auditor: Baker Tilly, Singapore
6. Fund Manager: Peter Partnership Limited, and is regulated by BVI Financial Services Commission

What is “Equalisation Method used for Performance Fee: Share Adjustment Method”?
Please see the attached “What is Equalisation” document file for more information.

What is the expected return of the fund?
We aim to double the client’s capital every 5-7 years. This is a high target, and it might not be achieved, as it depends on market’s attractiveness. Preservation of capital is the top priority, not returns.

What are the fees?
The investor would pay a subscription/top up/redemption fee of USD 0 for subscription/top up/redemption using USD or SGD currencies (or USD 70 for other currencies) to cover the fees charged by the Fund Administrator and other miscellaneous charges. New investors would pay a one-time fee of USD 140 during Initial Subscription to cover the fees charged by Trustee on additional work on risk assessment due to new ruling by MAS.

On the fund level, there is annual fixed cost of the fund (excluding performance fee, if any) is about USD 62k, which translates to less than 0.2% of the fund’s NAV a year (as of the year 2022). The bigger the fund, the smaller this expense is (as a percentage of the fund’s NAV). Every investor benefit from the fund’s economy of sale.

That is the way I believe mutual funds should be, for mutual benefit. Sadly, not every fund works this way. Most mutual funds charge a fixed annual management fees. The bigger these funds are, the more these fund managers make (regardless of performance). In short, the economy of scale benefits only the manager, and not to the investors of the fund. We in Peter Partnership do it differently.

The fund manager, Peter Partnership earns only from Performance Fee (if any). Also, there will only be performance fee if the fund earns more than 6% annualised. The fee is 18% (or 14% for Elite unitholders) of the return in excess 6% annualised, calculated monthly. “High Water Mark” would be used to ensure that investors do not have to pay performance fees for poor performance, but more importantly, guarantee that investors do not pay performance-based fees twice for the same amount of performance.

Isn’t it risky to concentrate your investments in only a few companies?
Quoting Buffett in Berkshire Hathaway’s Owner’s Manual, he wrote ,” Charlie’s family has the majority of its net worth in Berkshire shares; I have more than 98%. In addition, many of my relatives – my sisters and cousins, for example – keep a huge portion of their net worth in Berkshire stock.
Charlie and I feel totally comfortable with this eggs-in-one-basket situation because Berkshire itself owns a wide variety of truly extraordinary businesses. Indeed, we believe that Berkshire is close to being unique in the quality and diversity of the businesses in which it owns either a controlling interest or a minority interest of significance.”

He also says (which I totally agree with), “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

If there is large drawdown or departure of large unit holder (including Peter’s family), will the fund requires to sell off units for redemption (thereby affecting smaller unit holder)?
The fund is well prepared for huge redemptions, if any. It is because:
– The fund have margin facility, thus can use margin should needed to.
– Most of the fund’s holdings is in highly liquid stocks, so, can sell easily to raise cash.
– The fund size is pretty small actually, at USD 40 Million or so (as of January 2024).

Understand first 2 persons can joint account. If adding 3rd person, can I set condition to have ANY-ONE to operate / have access to the funds?
Yes, can.

Understand the fund is held with Trustee in Singapore. Can this be included in my Malaysia Will or I have to prepare a separate Singapore Will?
I suggest to prepare another will, so that can submit to Singapore court if needed.

Will my unit be subjected to US Estate Tax in the event I passed away?
No, because the fund invest in Stocks / financial instruments. Not the individual.

As Peter is making key investment decision, who will replace Peter in the event he resigned as fund manager?
Peter won’t resign. But should Peter passed away, the fund will only invest in Berkshire, so that it becomes 100% Berkshire proxy, with minimal annual cost and more importantly, without estate tax.

How do I invest?

1. Fill up the subscription forms, and
2. Attach a certified proof of identity (Identification Card, Passport or Driving License), and
3. Attach a certified proof of address (bank account, utility bills, Driving License, etc.) which are less than 3 months from subscription date.
4. Once the documents are accepted by the fund administrator, then only investments can be transferred to the fund’s bank account.