Connect with us


Phuket Business: Capitalizing on world illiquidity

Legacy Phuket Gazette



PHUKET: There have been several investment strategies, with great results, that I have been relying on recently. They are filling the gap left behind as banks are forced to shore up their capital bases and thus forgo many of their traditionally lucrative and profitable businesses.

One of these strategies – legal financing – I have written about several times. Another strategy that provides similar short-term loans backed by insurance, is buying high quality, short-term accounts receivable at a discount, a process known as factoring.

The Argyle Fund is one such alternative fund that provides a good return with extremely low volatility. It returns about 9.25% per year and is perfect for retirees looking for a steady income. The fund has an up front charge and only offers quarterly liquidity. In my opinion, this is not too much to ask in return for an income vehicle with such a steady return in today’s environment.

I recommend a minimum of a five year time horizon on money invested with Argyle, to avoid the back-end loaded redemption penalties, which decrease from 5% to nil over the five years.

An example of how factoring works is as follows. Let’s say a big multinational shoemaker has ordered shoestrings from a local manufacturer. The shoestrings have already been delivered, but the invoice terms are 90 days.

Unfortunately, many small businesses have had their lines of credit taken away as banks have sought to reduce their overall credit exposure. As such, the shoestring manufacturer needs the cash to pay suppliers upfront to be able to continue manufacturing while awaiting payment. This is where a factor will purchase the receivable at a discount.

Since multinational companies are considered pretty much a sure bet, insurance companies are happy to underwrite policies that protect against default. Thus, the factor can protect himself from the credit risk. Not all factors purchase insurance, however, the Argyle Fund only makes loans when they can purchase an insurance contract.

This greatly reduces the risk involved in the fund, although, one cannot go quite so far as to say it is guaranteed. However unlikely it is, a multinational could go bust during the 90 days and then the insurance company who underwrote the policy could go bust as well, and this could lead to a loss.

As the fund is diversified across many loans at once, I find it hard to imagine a scenario where the fund would take a large hit, short of the entire world systemically falling to pieces at once.

I personally think the probability of taking even a small hit is low enough that it almost can’t happen unless there is sophisticated fraud involved, which is a risk inherent to any fund in existence, anywhere in the world.

If you think you might benefit from such a fund, please check with your financial advisor to see if the fund matches your objectives and attitude to risk.

Too many retirees are turning to the stock market to try to make up for low deposit rates, which seem as if they will never return to normal levels. I fear those people may pay dearly for it.

Funds, which can offer some higher return without volatility, are a much better avenue in my opinion.

David Mayes MBA lives in Phuket and provides wealth management services to expats around the globe, specializing in UK pension transfers. He can be reached at 085-335-8573 or

— David Mayes


Want more Thailand news from the Thaiger family?

📱 Download our app on Android or iOS for instant updates on your mobile
📝️ Join the conversation on Thaiger Talk - discuss news & life in our Thailand forums
📧 Subscribe to our daily email newsletter
👍 Like/Follow us on Facebook
🔔 Subscribe to or Join our YouTube channel for daily video updates


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Coronavirus (Covid-19)4 hours ago

Dole pineapple factory has 34 new Covid-19 cases, 413 total

Coronavirus (Covid-19)6 hours ago

Chinese Sinovac vaccine debuts in Singapore to high demand

Drugs7 hours ago

Drug smuggler caught in Kalasin with 300 kg of marijuana

Phuket Sandbox July 1st


Thaiger is getting behind local businesses for the restart of tourism in July - up to 50% discounts across all advertising packages in June!

Politics8 hours ago

Amendment to reform Constitution rejected by Parliament

Medical9 hours ago

Gender Health Clinic opens in Bangkok for transgender needs

Coronavirus (Covid-19)11 hours ago

30 million baht added to vaccine side effects compensation fund

Coronavirus (Covid-19)12 hours ago

Plan for 16-week gap between AstraZeneca vaccines dropped

Coronavirus (Covid-19)13 hours ago

CCSA: 120 day reopening will proceed with conditions

Tourism14 hours ago

Sandbox latest, CCSA says all regions reopening must reach 70% local vaccination

Coronavirus (Covid-19)17 hours ago

Covid UPDATE Saturday: 3,667 new infections and 32 deaths

Politics18 hours ago

Thamanat elected to role of head ‘fixer’ in Palang Pracharat party

Expats1 day ago

List: China has over 50% of all foreign-owned condos in Thailand

Coronavirus (Covid-19)1 day ago

Government plans 10 million vaccines for July

World1 day ago

Thailand News Today | Vaccine deaths investigation, PM heads to Phuket, BMA extends vendor licences | June 18

Thailand1 day ago

1 million AstraZeneca doses arrive, Anutin says “more” on the way

Thailand4 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism4 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket4 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism4 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand4 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism4 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand5 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand5 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand5 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand5 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand5 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand5 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand5 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand5 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand5 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8