Wealth Management in the Digital Age: An Interview with Bas Kooijman of DHF Capital
Bas Kooijman, the CEO and Asset Manager of DHF Capital talks about how they got their start in the industry and what differentiates them from other companies in an exclusive interview with Gulf Insider.
Can you just briefly tell us what your story is?
I sold my telecom company in 2015 because I saw how international wholesale telecom had so much to do with different currencies. We were trading in 35 different countries and seven different currencies. When I could move into a different market of finance, I started trading professionally in 2014 and turned into a friends and family fund in 2019 with a beautiful five-year track record. We were sold out very quickly with 50 investors that you can allow in such a fund. And then we just wanted to professionalise, to open our securitization vehicle and our hedge funds later to be able to make this a more publicly tradable and more publicly available fund for everyone.
Tell us why you are expanding into Bahrain.
I think this is an extremely important region. During our recent visit to the Gulf, we’ve successfully built a client base in Oman and the UAE, and we’re seeing significant potential in Bahrain and the Saudi region. We are deeply committed to expanding our presence in this area. We have two offices in Dubai, one for the IT sector in JLT and one in DIFC, with our licence there. We are now looking forward to seeing what we can do and achieve in Bahrain.
What does your typical client profile look like in Bahrain and the GCC?
The client profile ranges from high-net-worth individuals to family offices for institutional investors. So, it’s a mix of individuals that we would like to support on their financial growth journey as a corporate entity that may take care of others as well.
On average, what annual returns have you achieved for your clients, and how does this compare with others in the industry?
It ranges between 10% and 25% a year. We are mixing this into three different funds with three different risk categories. So, it’s dependent on the person, individual or company that they’re looking for. The funds range from 10% with very low volatility, and very low risk towards fixed-income products that are giving a steady return of 12%, 16% or 18% a year. But if you are locked in for a bit longer, you have to choose between flexibility and a little bit longer commitment, where we have more time to deliver those results for the client.
How does your fee structure work?
They’re varied. Mostly, there’s a one-time joining fee for setting up the client. We have a heavy IT desk that needs to make sure all the risk management is set up correctly. After that, there is a management fee that can be considered a performance fee. But as mentioned, we also have fixed-income products. So, you know exactly what you’re going to get and there are no fees in that fixed result. All the results for us are above that proven number for the client.
What do you offer clients that they cannot do for themselves?
I think it’s very difficult to make such a diversified portfolio for yourself. You would need to invest in multiple funds. You would need to invest yourself in different information sources to be able to trade and understand European stocks, American stocks, forex markets and bonds. You would need to follow the news to know everything that’s going on with interest rates. So, we say, if you want to actively trade in so many asset classes, that’s what we are doing and we would like to do it for our client. A more passive way of investing in a diversified portfolio is the alternative, and you can do that perfectly yourself.
As you know the pulse around the world on different markets, are there any particular markets, trends or things you might see unfolding that people should be looking into in the coming years?
Presently, we have noticed that gold has jumped to a record high. As a non-volatile product with a safety net, it has been volatile and probably comes at the same time that cryptocurrency is rising very rapidly. In the end, we just stuck to our diversification strategy. We have two software packages that make sure that we are programming in-house to give us this very stable result. Our alpha fund is four-and-a-half years positive, giving a very stable result to our clients. And all we need to do is manage the risk and rebalance between those asset classes. So, when one makes a lot of money, we scrape off those many profits and move them into the asset class this month, this week, or this day. We underperform so that we rebalance and keep going with a low-volatility strategy.
What differentiates you compared to other companies offering similar services?
I think most of the hedge funds are focusing on one asset class, and they can be really good in that asset class. We have had an international team for years and built it up into different trading desks in over those four different asset classes. I think our strongest point is our ability to diversify and our IT team because, in the end, we are a manually traded firm, but we are very algorithmic in rebalancing and risk management. So, we are not an algorithmic trading firm, and we are also not a fully manual firm that may act too late on things like risk or rebalancing between their different asset classes. I think it’s a special mix that clients mostly have not heard of when we meet them for the first time. But after a short explanation, they understand the value of this.
What’s the best piece of financial advice that you were ever given?
The best piece of advice would be for me to make sure that you’re diversified in your portfolio. Your net assets or net wealth are diversified into things like physical gold, which is a hard asset, towards flexible trading opportunities that are very liquid and able to exit clearly and towards some boring things, like buying a Triple A bond that will give you a low return mixed with high-volatility trading on the FX market, for example. So, diversity is everything.
