Investment Process
Proces
BNB believes that sound investment decisions come from a process repeated, more than from a single insight. From the first look at a company to the period after an investment has been exited, every investment goes through the same five stages. Each stage has its questions to answer, and its checks to pass before moving on to the next.
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Preliminary Corporate Valuation Research
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Comprehensive Valuation Analysis
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Investment Review & Strategy Formulation
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Strategic Execution
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Exit Strategy & Post-Investment Management
Preliminary Corporate Valuation Research (Deep Dive)
- We conduct a comprehensive review of potential investment targets in the market, from the Pre-IPO stage to Post-IPO companies.
- Through meetings with target company management (1:1 Q&A) and attendance at official IR sessions, we identify core competitive strengths beyond what is available in disclosed data.
Comprehensive Valuation Analysis (Multi-Layer Analysis)
- In addition to company fundamentals, we analyze IPO market sentiment and the supply-demand environment, price attractiveness relative to the peer group, and potential risk factors from a multidimensional perspective.
- Through our proprietary integrated analysis model, which combines quantitative valuation with qualitative growth assessment, we derive the fair value of each target company.
Investment Review & Strategy Formulation (Decision Making)
- Through multifaceted review by fund managers and the risk management team, we determine whether to invest in each issue and formulate strategies to maximize returns.
- We establish investment strategies and scenario-based trading strategies in advance, taking into account the characteristics of each fund, to minimize management uncertainty.
Strategic Execution (Execution)
- While building on the strategies established in advance, we deploy optimal strategies in line with changing market conditions.
- By closely monitoring the valuation of target companies and market supply-demand flows, we capture the optimal timing to execute strategic management.
Exit Strategy & Post-Investment Management (Exit & Monitor)
- By comprehensively considering each company's earnings and events, industry conditions, and the macro environment, we optimize the exit strategy for each issue to lock in returns.
- Through strict application of stop-loss principles, we limit volatility risk and conduct ongoing value monitoring of our holdings.
Why a Process
Process Protects Judgment
The IPO market runs on a tight calendar, and information changes quickly. Bookbuilding schedules for several companies overlap, and IPO market sentiment can shift within a few weeks. In this environment, a defined process sustains trust longer than individual instinct.
BNB's five stages run from research and analysis to review, execution, and exit and post-investment management. The output of each stage is the starting point of the next, and the decisions at every stage are cross-checked by the Compliance Team.
The process is not there to slow management down. It is there to make the basis of each decision clear and to avoid repeating the same mistakes.
Checkpoints
What We Check at Each Stage
Preliminary Corporate Valuation Research
- The business model and its position in the industry: what the company earns from, and from whom
- The trend and quality of earnings shown in the registration statement and financial statements
- Competitive strengths and risk factors confirmed in management meetings and IR sessions
- The shareholdings of the largest shareholder and existing investors, and the volume of shares that could become tradable after listing
Comprehensive Valuation Analysis
- The offering price relative to comparable (peer) companies, and the basis for the pricing
- Offering size, market supply and demand, and recent IPO market sentiment
- Fair value combining quantitative valuation and a qualitative assessment of growth potential
- A check on how far value would change if key assumptions prove wrong
Investment Review & Strategy Formulation
- Whether the decision to invest and the size of participation fit the fund's character and limits
- Decisions on the bookbuilding bid price and quantity, and on whether to offer a lock-up commitment
- Trading plans for each scenario: immediately after listing, at the end of lock-up periods, and if events unfold differently than expected
- Prior confirmation by the Compliance Team of compliance with laws and internal rules
Strategic Execution
- The gap between the strategy set in advance and actual market movements
- Timing of trades in response to changes in valuation and supply and demand
- Real-time monitoring of whether management remains within risk limits
- Fair allocation among the funds under management, and any conflicts of interest
Exit Strategy & Post-Investment Management
- An exit plan for each position that takes into account company results and events, industry conditions, and the macroeconomic environment
- Application of the loss-cut principle, and committee deliberation when an exception is needed
- Ongoing value monitoring and performance analysis of holdings
- Root-cause investigation when issues arise, and guidelines to prevent recurrence
One IPO, Five Steps
How One IPO Passes Through Our Five Steps
Our investment process runs on the actual offering calendar. Here, in calendar order, is how a single IPO passes through BNB's five steps—from the first look at a company preparing to list until after its lock-up ends. We move to the next step only after completing the checks of the current one, and decisions to invest are made after investment review and prior confirmation by the Compliance Team.
| Offering calendar | BNB step | What we check at this step |
|---|---|---|
| Preparation for listing · preliminary listing review | STEP 1 Preliminary Corporate Valuation Research | Business model and position in the industry, earnings trend, and competitive strengths and risk factors identified in management meetings and official IR sessions |
| Filing of the registration statement | STEP 2 Comprehensive Valuation Analysis | Pricing rationale for the offer, price level against comparable companies, offering size, and the number of shares that could trade after listing |
| Just before bookbuilding | STEP 3 Investment Review & Strategy Formulation | Whether and how much to participate, bid price and quantity, whether to offer a lock-up commitment, scenario-based trading plans, and prior confirmation of compliance with laws and internal rules |
| Bookbuilding · subscription · allocation | STEP 4 Strategic Execution | Orders within risk limits, allocation by fund and account according to criteria set in advance, and real-time monitoring |
| Listing and after lock-up expiry | STEP 5 Exit Strategy & Post-Investment Management | Timing of sales according to scenarios, the loss-cut principle, first results and changes in tradable float, and ongoing review of the value of holdings |
- The offering calendar shows the usual sequence, which varies with the company and market conditions. The same five steps apply to other strategies such as Pre-IPO and mezzanine, while the items examined at each step differ by strategy.
Same Steps, Different Questions
The Questions That Change With Each Strategy
The order of the five steps is the same, but each strategy puts weight on different questions. Here is what we look at particularly closely, by strategy, at the analysis step and at the exit step.
| Strategy | Particular focus at the analysis step (STEP 2) | Particular focus at the exit and post-investment step (STEP 5) |
|---|---|---|
| Pre-IPO | Competitiveness of the business and the likelihood of meeting listing requirements; investment price and form (common shares, RCPS, convertible bonds, etc.) | Listing schedule and timing of exit; how to recover the investment if the listing is abandoned; whether the shares are subject to lock-up |
| IPO (offering shares) | Pricing rationale in the registration statement; price level against comparable companies; offering size | Early price swings after listing; lock-up commitment period; tradable float |
| Post-IPO | First results after listing compared with what was presented at the offering | Changes in tradable float as lock-up periods end; price and supply and demand as the market's assessment settles |
| Listed-company mezzanine | Issuer's financial stability and repayment capacity; conversion or exercise price and its adjustment terms | Timing of conversion or exercise; early redemption (put) terms; changes in the issuer's credit |
| SPAC | Trading price relative to the offering price and the funds held in trust; the target company's business and the merger ratio | Whether the merger is completed; investor protections such as appraisal rights; share price movements after the merger |
| FoF | Underlying funds' strategies, managers and risk management systems | Underlying funds' liquidity and redemption terms; fees charged at both the fund-of-funds and underlying-fund levels |
- The items by strategy adapt the descriptions on our IPO Strategy page to the investment process. The items examined in practice may vary with the nature of each fund or mandate.
Alongside the Process
Checks That Move With the Process
Each stage of the investment process is paired with an internal control procedure. Before investment, the Compliance Team confirms in advance the appropriateness of the investment and its compliance with laws and internal rules. At the time of investment, real-time monitoring and periodic checks follow; after investment, post-investment monitoring and internal audits.
Investment review, risk management, and the valuation of collective investment property are each deliberated by a dedicated committee. The structure is designed so that every decision by the investment team is verified once more.
FAQ
Frequently Asked Questions About Our Investment Process
Does every investment go through all five stages?
Yes. The items examined at each stage may vary with the investment and the strategy, but the sequence is always the same: research, analysis, review, execution, and exit and post-investment management.
How are positions with losses managed?
We respond in accordance with the loss-cut principle. Where an exception to the principle is required, it is deliberated by the Risk Management Working Committee.
What happens if a problem arises during management?
When a risk event occurs, we carry out scenario-specific measures under the principle of same-day resolution. We then identify the cause, put management guidelines in place, and confirm implementation through regular internal audits.
How are assets without a market price valued?
Assets with no market price, such as Pre-IPO shares, are valued at fair value according to the methodology set by the Collective Investment Property Valuation Committee.
