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B73

B73

$0.128 0.2B market cap February 22, 2026
Global Investments Limited B73 BUFFETT / MUNGER / KLARMAN SUMMARY
1 SNAPSHOT
Price$0.128
Market Cap0.2B
2 BUSINESS

Global Investments Limited is an externally managed closed-end fund that fails fundamental quality tests for long-term investment. With a 5-year average ROE of ~2%, no competitive moat, volatile mark-to-market returns, and a 1%+ annual management fee drag, GIL does not generate adequate returns to justify the embedded credit risks in its CLO and AT1 bond portfolio. The 6.25% dividend yield is superficially attractive but unreliable (cut twice in 5 years), and FY2024's seemingly strong results were inflated by S$15.9M in unrealized fair value gains. At SGD 0.128, the 22.8% discount to NAV is insufficient compensation for the structural deficiencies. Income-seeking investors would be better served by low-cost bond ETFs offering similar yields with superior liquidity, lower fees, and greater diversification.

3 MOAT None

No moat. GIL is an investment fund, not an operating business. Anyone can buy bonds, CLOs, and AT1 securities. There is no proprietary advantage, brand power, switching cost, or network effect.

4 MANAGEMENT
CEO: Boon Swan Foo (Chairman; Tan Mui Hong is SICIM CEO)

Average - Consistent dividends and buybacks are positive, but scrip dividend scheme and bonus issues dilute per-share value. 1% base management fee permanently reduces NAV growth.

5 ECONOMICS
86.5% Op Margin
5.5% ROIC
5.5% ROE
12.8x P/E
0.019B FCF
-32.1% Debt/EBITDA
6 VALUATION
FCF Yield9.1%
DCF Range0.08 - 0.124

Overvalued by 3-60% depending on method. FY2024 P/E of 12.8x is misleading due to S$15.9M unrealized fair value gains. Normalized P/E is 19-22x.

7 MUNGER INVERSION
Kill Event Severity P() E[Loss]
Credit cycle downturn would impair CLO collateral and potentially trigger AT1 write-downs. FY2022 loss of S$35M demonstrates catastrophic downside. HIGH - -
External management fee drag of 1%+ base plus 20% incentive permanently reduces shareholder returns. MED - -
8 KLARMAN LENS
Downside Case

Credit cycle downturn would impair CLO collateral and potentially trigger AT1 write-downs. FY2022 loss of S$35M demonstrates catastrophic downside.

Why Market Right

Credit cycle downturn or recession impairs CLO/AT1 portfolio; Rising rates cause further mark-to-market losses; AT1 write-down event (Credit Suisse precedent); Further dilution from scrip dividend scheme and bonus issues; Key man risk - chairman is 70 years old

Catalysts

Interest rate cuts would boost bond valuations and NAV; Credit spread tightening improves CLO and AT1 marks; Continued share buyback program reduces discount to NAV; Boon Swan Foo's 22.66% stake aligns incentives for NAV accretion

9 VERDICT REJECT
C Quality Moderate - Clean balance sheet with near-zero corporate leverage and S$87M net cash. However, underlying portfolio contains leveraged credit instruments (CLOs, AT1 bonds) with embedded downside risk. Dividend was cut in both FY2020 and FY2022.
Strong Buy$0.075
Buy$0.095
Fair Value$0.124

Do not invest. No entry point at current prices offers adequate margin of safety.

🧠 ULTRATHINK Deep Philosophical Analysis

Global Investments Limited (SGX: B73) - Deep Philosophical Analysis

The Core Question: What Are We Actually Buying?

When Buffett buys a stock, he asks: "Am I buying a wonderful business at a fair price?" With Global Investments Limited, we must first ask a more fundamental question: "Is this a business at all?"

The answer, in the Buffett framework, is no. GIL is not a business. It is a pool of capital managed by an external party (SICIM) that collects fees for deploying that capital into publicly available credit instruments. There is no factory, no brand, no customer relationship, no intellectual property, no distribution network. There is only money, a manager, and a portfolio of bonds and CLOs that anyone with sufficient capital could replicate.

This distinction matters enormously. When you buy shares in Coca-Cola, you own a fraction of the world's most powerful beverage brand -- something that generates economic value beyond the sum of its physical assets. When you buy shares in GIL, you own a fraction of a bond portfolio minus management fees. The intrinsic value of Coca-Cola exceeds its liquidation value by orders of magnitude. The intrinsic value of GIL is, by definition, less than its NAV -- because the NAV must be reduced by the present value of all future management fees.

The Moat Meditation: Where Is the Durable Advantage?

Munger teaches us to invert -- instead of asking "what makes this business great?", ask "what would prevent me from replicating it?" The honest answer for GIL is: nothing. A competent fixed-income portfolio manager could construct a similar portfolio of CLOs, AT1 bonds, and listed equities. The barriers to entry are capital (which GIL raised through its listing) and market access (which is available to any institutional investor).

This is the anti-moat. There is no flywheel, no network effect, no cost advantage, no regulatory barrier. The only defensible asset is Boon Swan Foo's personal reputation and his 22.66% ownership stake, which provides some assurance that he will not deliberately destroy value. But reputation is not a moat -- it is a character assessment, and character cannot be audited in a 10-K filing.

The CLO and AT1 bond markets are increasingly commoditized. ETFs now offer access to these asset classes at a fraction of GIL's fee structure. The structural advantage that a listed closed-end fund once offered -- access to institutional credit markets for retail investors -- has been eroded by financial innovation. GIL's competitive position weakens with each passing year as lower-cost alternatives proliferate.

The Owner's Mindset: Would Buffett Own This for 20 Years?

Imagine Buffett at his desk in Omaha, evaluating GIL. He would note the 6.25% yield and nod approvingly at the income. He would appreciate the low leverage and Boon Swan Foo's significant ownership. But then he would do the math.

Over 20 years, at a 1% base management fee, SICIM would extract roughly 20% of cumulative NAV (compounding reduces this, but the magnitude is correct). Add incentive fees in good years, and the manager could capture 25-30% of the value created by the underlying assets. Buffett would recognize this as the "silent partner" problem -- a partner who takes a disproportionate share of the profits but bears none of the losses.

The 5-year track record confirms the problem. Book value per share has declined from S$0.19 to S$0.17, a 10.5% destruction of per-share value. Add back S$0.036 in cumulative dividends (adjusted for cuts), and total shareholder return was roughly 0.8% over five years. Meanwhile, SICIM collected ~S$13M+ in base fees during this period. The manager ate well while the shareholders starved.

Buffett's verdict would be swift: "If a management fee is eating your returns, you don't have an investment -- you have a charity for the fund manager."

Risk Inversion: What Could Destroy This Business?

Munger's inversion principle demands we catalog the paths to permanent capital loss:

Path 1: Credit Crisis. GIL's portfolio is concentrated in credit instruments that are correlated in stress. In 2008, its predecessor structure was devastated by the global financial crisis. In FY2022, a mere interest rate hiking cycle caused S$35M in losses. A genuine credit crisis -- leveraged loan defaults spiking, AT1 bonds being written down, CLO equity tranches zeroing -- could destroy 30-50% of NAV in a single year. This is not a tail risk; it has happened before.

Path 2: AT1 Write-Down. The Credit Suisse AT1 wipeout in 2023 demonstrated that these instruments carry genuine zero-recovery risk. If GIL holds a concentrated AT1 position in a bank that fails, the loss would be permanent and unrecoverable.

Path 3: Slow Bleed. Even without a crisis, the combination of management fees (1%+/year) and dividend payments (6.25% yield) means that if the portfolio earns less than ~7.25% annually, NAV per share declines. Given the 5-year average ROE of ~2% on equity, the slow bleed scenario is not hypothetical -- it has been the actual experience.

Path 4: Liquidity Trap. With average daily trading volume of ~S$17,000, a meaningful position in GIL cannot be exited in a crisis. If you own S$100,000 worth and need to sell during a panic, it could take weeks to exit without moving the price significantly against you.

Valuation Philosophy: Is the Price Justified by Quality?

At S$0.128, GIL trades at a 22.8% discount to its stated NAV of S$0.1658. The value investor's instinct is to see a 23% discount as a bargain. But this instinct must be disciplined by reality.

The discount exists for structural reasons that will not change:

  1. External management fees will always reduce NAV growth
  2. The portfolio will always carry embedded credit risk
  3. Liquidity will always be poor
  4. There will never be a catalyst to close the discount (no activist, no internalization, no merger)

The appropriate framework is not "buy at a discount to NAV and wait for reversion." It is "what total return can I expect, and does it compensate for the risk?" On normalized earnings of ~S$11M (after fees), the fund generates about S$0.0067/share. At S$0.128, that is a 5.2% earnings yield. After paying the S$0.008 dividend, the remaining S$0.0 is essentially zero -- all earnings are paid out, with nothing left for NAV growth.

This means total expected return equals the dividend yield: 6.25%. For an instrument with the volatility profile of a leveraged credit portfolio and the liquidity of a micro-cap stock, 6.25% is inadequate compensation. A Singapore government bond yields 3%+ with zero risk. The excess return of ~3% does not compensate for the possibility of a 20-30% drawdown in a credit event.

The Patient Investor's Path

The honest conclusion is that GIL is not an investment for the patient, quality-focused investor. It is, at best, a trade for the tactical investor who can time credit cycles -- buying during periods of extreme fear (when the discount to NAV exceeds 40% and the yield exceeds 10%) and selling during periods of optimism.

For the Buffett/Munger/Klarman disciple, the prescription is clear: pass. Life is too short and capital too precious to own an externally managed fund with mediocre returns, embedded leverage risk, and a fee structure that enriches the manager at the shareholder's expense.

The 6.25% yield siren song is alluring, particularly in a low-rate environment. But as Munger reminds us: "The first rule of fishing is to fish where the fish are." The fish -- wonderful businesses at fair prices -- are not found in the shallow pond of externally managed closed-end funds. They are found in companies that generate durable economic value through products and services that customers need and competitors cannot easily replicate.

Walk away. The opportunity cost of capital deployed in GIL is the true cost -- the wonderful business you could have bought instead.

"There are no called strikes in investing. You can stand at the plate and wait for the perfect pitch." -- Warren Buffett

1. Company Overview

Global Investments Limited (GIL) is a Singapore-listed closed-end investment fund managed by Singapore Consortium Investment Management Limited (SICIM). Originally incorporated in Bermuda on April 24, 2006, and listed on SGX on December 20, 2006, GIL transferred its domicile to Singapore on January 7, 2019.

GIL invests across a diversified portfolio of income-generating assets including:

  • Bonds and CLOs (collateralized loan obligations) - primary income driver
  • Bank Contingent Capital - Additional Tier 1 (AT1) and Point-of-Non-Viability Tier 2 (PONV T2) securities
  • Listed Equities - portfolio of global equities
  • Cash and Other Net Assets

The company was formerly known as Babcock & Brown Global Investments Ltd. Its parent, Babcock & Brown, went bankrupt during the 2008 financial crisis, which devastated GIL's book value. The company has since rebuilt under SICIM's management.

Key Fact: GIL has only 1 employee. It is entirely externally managed by SICIM, whose Executive Chairman is Boon Swan Foo (also GIL's Non-Executive Chairman) and whose CEO is Tan Mui Hong (also a Non-Executive Director of GIL).

2. Business Quality Assessment

The Fundamental Problem: Externally Managed Fund

GIL is not an operating business generating economic value through products or services. It is an externally managed investment vehicle. This creates several structural issues:

  1. No competitive moat: Anyone can buy bonds, CLOs, and equities. There is no proprietary advantage.
  2. External management fee drag: SICIM charges a 1% base fee on Net Investment Value plus a 20% incentive fee on outperformance. These fees permanently reduce returns.
  3. Principal-agent conflict: Management's incentives (maximize AUM for fees) may diverge from shareholders' interests (maximize NAV per share).
  4. No operational leverage: Returns are entirely dependent on market conditions and asset selection.

ROE Analysis

Year ROE (%) Comment
FY2024 9.63 Strong year - driven by fair value gains
FY2023 3.31 Below-average year
FY2022 (12.31) Significant losses from rate hikes/credit repricing
FY2021 4.79 Recovery year
FY2020 4.53 Pandemic year - resilient

5-Year Average ROE: ~1.99% (dragged down by 2022 loss) Excluding FY2022: ~5.57%

This is mediocre. Even in the best year (FY2024 at 9.63%), returns barely justify the cost of equity for a fund holding credit instruments. The 5-year average ROE of ~2% is well below the ~10% hurdle rate a value investor would demand.

Verdict: FAILS the Buffett ROE test. ROE must consistently exceed 15% for a quality business. GIL does not come close.

3. Financial Fortress Assessment

Balance Sheet Strength

Metric FY2024 Assessment
Total Assets SGD 273M Moderate
Total Liabilities SGD 1.61M Minimal
Debt/Equity 0.6% Essentially unlevered
Net Cash Position SGD 87.5M Strong
Current Ratio 61.6x Ultra-liquid

GIL operates with virtually no leverage at the corporate level. This is a genuine strength - the fund does not use borrowed money to amplify returns or losses. However, the underlying assets (CLOs, AT1 bonds) are themselves leveraged instruments, so the actual economic leverage embedded in the portfolio is substantially higher than the balance sheet suggests.

Income Stability

GIL's income is fundamentally volatile:

  • Interest income (~S$10.8M/year): Relatively stable from bond coupons and CLO distributions
  • Fair value gains/losses: Extremely volatile. Swung from S$1.1M gain (FY2023) to S$15.9M gain (FY2024), after a catastrophic loss year in FY2022
  • Dividend income (~S$2.9M): Small and relatively stable

The problem is that 54% of FY2024's total income came from fair value gains - these are unrealized, non-cash, and can easily reverse. The FY2022 loss of S$35.1M demonstrates this risk clearly.

Fortress Rating: Moderate. Clean balance sheet, but volatile income and embedded portfolio leverage reduce the true safety margin.

4. Portfolio & Asset Analysis

Asset Allocation (Estimated from Available Data)

GIL's portfolio is concentrated in credit instruments:

  • Bonds & CLOs: Largest allocation - generates majority of interest income
  • Bank Contingent Capital (AT1/T2): Significant allocation - high yield but with write-down risk
  • Listed Equities: Smaller allocation - generates dividend income
  • Cash & Other: ~S$87M net cash position

Key Portfolio Risks

  1. AT1/CoCo Bond Risk: AT1 bonds can be written down to zero if the issuing bank's capital ratio falls below triggers. Credit Suisse AT1 holders lost everything in 2023.
  2. CLO Risk: CLOs are leveraged credit structures. In a credit cycle downturn, equity and junior tranches can suffer severe losses.
  3. Interest Rate Sensitivity: Rising rates hurt bond prices (as demonstrated in FY2022). Falling rates help.
  4. Credit Cycle Risk: A recession would impair CLO collateral (leveraged loans) and potentially trigger AT1 write-downs.
  5. Concentration Risk: Portfolio appears concentrated in credit instruments with correlated risks.

5. Management Assessment

Board Composition

Name Role Since Independent?
Boon Swan Foo Chairman 2009/2011 No (SICIM Executive Chairman)
Abdul Jabbar Bin Karam Din Lead Independent Director 2019 Yes
Dr. Charlie Lay Independent Director 2020 Yes
Ng Thiam Poh Independent Director 2021 Yes
Tan Mui Hong Non-Executive Director 2010/2019 No (SICIM CEO)

Insider Ownership

Shareholder Stake Alignment
Boon Swan Foo (Chairman) 22.66% (379M shares) Strong - significant personal stake
Treasury Shares 3.06% (51.1M shares) Buyback activity
Ng Thiam Poh 0.007% Minimal

Boon Swan Foo's 22.66% stake is a genuine positive. As both SICIM's Executive Chairman and GIL's largest shareholder, his interests are partially aligned with minority shareholders. However, he also earns management and incentive fees through SICIM, creating a dual loyalty.

Fee Structure Concerns

  • Base Fee: 1.0% per annum of Net Investment Value (currently ~S$2.7M/year)
  • Incentive Fee: 20% of outperformance over benchmark (with deficit carry-forward)
  • Total Cost: In good years, total fees could reach 2-3% of NAV, significantly eroding net returns

For context, a passive bond ETF charges 0.05-0.20% per year. GIL's fee structure is 5-50x more expensive. The only justification would be consistent, significant alpha generation - which the 5-year track record does not demonstrate.

Capital Allocation

  • Share Buybacks: Active buyback program (regular small purchases in Jan-Feb 2026)
  • Dividends: Semi-annual payments of SGD 0.004/share (SGD 0.008/year total)
  • Scrip Dividend Scheme: Allows shareholders to receive dividends as shares, but dilutes those who take cash
  • Verdict: Reasonable capital allocation, though the scrip dividend scheme is mildly dilutive

6. Dividend Analysis

Dividend History

Year Total DPS (SGD) Yield at Year-End Notes
FY2025 0.008 6.25% Maintained
FY2024 0.008 6.25% Interim + Final
FY2023 0.008 6.25% Plus 25:1 bonus issue
FY2022 0.004 3.13% Cut to one payment (loss year)
FY2021 0.008 6.25% Two semi-annual payments
FY2020 0.004 3.13% Cut during pandemic

Dividend Assessment:

  • Yield: 6.25% is attractive on the surface
  • Stability: UNRELIABLE - dividend was halved in both FY2020 and FY2022
  • Coverage: FY2024 payout ratio of 19.2% is well-covered, but this reflects unusually high fair value gains. On normalized income (interest + dividends only ~S$13.7M), the payout of ~S$13M is barely covered
  • Growth: No dividend growth in absolute terms - still paying the same SGD 0.008 as 5 years ago

The 25:1 bonus issue in 2023 is noteworthy. It increased shares outstanding without adding economic value, effectively diluting existing holdings. Combined with the scrip dividend scheme, per-share value has been gradually eroded.

7. Valuation

Current Metrics

Metric Value Assessment
Price SGD 0.128 -
NAV/Share SGD 0.1658 -
Discount to NAV 22.8% Moderate
P/E (TTM) 12.8x Misleading (includes fair value gains)
P/B 0.75x Below book value
Dividend Yield 6.25% Attractive headline, but not growing
EV/NAV ~0.75x At discount

Discount to NAV Analysis

A 22.8% discount to NAV is typical for externally managed closed-end funds. The discount exists for good reasons:

  1. Management fee drag (1%+ annually reduces NAV growth)
  2. Volatile returns (FY2022 showed 12.3% NAV destruction)
  3. Limited liquidity (average volume ~136K shares, only ~S$17K/day)
  4. External management structure (no ability for shareholders to influence strategy)
  5. Scrip dividend and bonus issue dilution

Fair Value Estimation

Method 1: Adjusted NAV

  • NAV per share: S$0.1658
  • Fair discount for external management and fees: 25-35%
  • Fair value range: S$0.108 - S$0.124

Method 2: Normalized Earnings

  • Sustainable interest + dividend income: ~S$13.7M
  • Less management fees: ~S$2.7M
  • Net sustainable income: ~S$11.0M
  • At 12x earnings: S$132M market cap / 1.64B shares = S$0.080/share
  • At 15x earnings: S$165M / 1.64B = S$0.101/share

Method 3: Dividend Yield

  • Current DPS: S$0.008
  • At 7% yield (fair for volatile income): S$0.114
  • At 8% yield (accounts for cut risk): S$0.100

Fair Value Range: SGD 0.080 - 0.124 Current Price: SGD 0.128 -- ABOVE the top of fair value range

The stock appears fairly valued to slightly overvalued when accounting for the structural issues. The headline P/E of 12.8x is misleading because FY2024 was an abnormally good year driven by S$15.9M in fair value gains. On normalized earnings, the P/E would be closer to 19-22x.

8. Risk Assessment

High Risks

  1. Credit cycle downturn: A recession would impair CLO collateral and potentially trigger AT1 write-downs. FY2022's S$35M loss occurred in a mere rate-hiking cycle - an actual credit crisis would be far worse.
  2. AT1 write-down risk: The Credit Suisse precedent shows AT1 bonds can go to zero even when equity holders receive some recovery.
  3. External manager conflicts: SICIM earns fees regardless of performance (base fee on NAV). Incentive alignment is imperfect.

Medium Risks

  1. Interest rate volatility: Sharp rate moves cause mark-to-market swings in bond portfolios
  2. Liquidity risk: Very thin trading volume makes exit difficult for larger positions
  3. Dilution risk: Scrip dividend scheme and potential bonus issues dilute per-share value
  4. Key man risk: Boon Swan Foo (age 70) and Tan Mui Hong are critical to SICIM's management

Low Risks

  1. Balance sheet risk: Near-zero leverage at corporate level
  2. Regulatory risk: Singapore-listed, well-regulated environment
  3. Currency risk: Global portfolio with multi-currency exposure

9. Competitive Comparison

GIL competes with:

  • Bond ETFs: Much lower fees (0.05-0.30%), better liquidity, greater transparency
  • Other SGX-listed funds: Some trade at narrower discounts with better track records
  • Direct bond/CLO investments: Institutional investors can access these markets directly

There is no compelling reason to own GIL over a diversified bond ETF, except for:

  1. The 6.25% dividend yield (which is not guaranteed and has been cut twice in 5 years)
  2. Boon Swan Foo's 22.66% ownership alignment
  3. The discount to NAV (but this has been persistent and may never close)

10. Investment Thesis

The Bull Case

  • Trading at 22.8% discount to NAV
  • 6.25% dividend yield with semi-annual payments
  • Strong chairman alignment (22.66% ownership)
  • Near-zero corporate leverage
  • FY2024 showed strong recovery (ROE 9.63%, net income up 197%)

The Bear Case

  • Externally managed fund with 1% base fee + 20% incentive fee
  • Volatile returns: 5-year average ROE of ~2% is unacceptable
  • FY2022 demonstrated catastrophic downside risk (S$35M loss, -12.3% ROE)
  • Dividend has been cut twice in 5 years - not reliable income
  • No moat, no pricing power, no competitive advantage
  • Very low liquidity
  • FY2024's earnings were inflated by S$15.9M in unrealized fair value gains

Verdict: REJECT

Global Investments Limited fails the fundamental quality tests required for long-term investment:

  1. No moat: This is an investment fund, not a business with competitive advantages
  2. Mediocre returns: 5-year average ROE of ~2% is well below the cost of equity
  3. Volatile and unreliable income: FY2022's massive loss demonstrates the embedded risk
  4. Fee drag: 1%+ annual management fees permanently destroy shareholder value
  5. Dividend is not sacred: Two cuts in five years disqualifies this as a reliable income investment
  6. No margin of safety at current price: At SGD 0.128, the stock is not cheap enough to compensate for all these deficiencies

The 6.25% headline yield is a trap. It obscures the reality that total returns (capital gains + dividends) over 5 years have been negative for shareholders who held through the FY2022 drawdown. Book value per share has declined from S$0.19 (FY2020) to S$0.17 (FY2024), destroying value even as dividends were paid.

For income-seeking investors, a diversified bond ETF (e.g., iShares Singapore Bond ETF or a global aggregate bond fund) offers similar yield with lower fees, better liquidity, greater diversification, and no external manager conflicts.

Entry Prices (If Reconsidering)

Level Price (SGD) Discount to NAV Yield Rationale
Strong Buy 0.075 ~55% 10.7% Extreme pessimism, compensates for all risks
Accumulate 0.095 ~43% 8.4% Meaningful discount, covered dividend
Current Price 0.128 ~23% 6.25% Insufficient margin of safety

Analysis based on publicly available data as of February 22, 2026. This is not financial advice.