Discipline is key. Not only for consistency in delivering results, but also to surpass your limits everyday.
David Amaryan is the CEO and founder of Balchug Capital, an international investment management firm specialising in cross asset event-driven opportunities as well as secular growth strategies used to balance clients’ portfolios. With extensive knowledge and expertise in identifying investment opportunities in Russia, David has become the preferred partner for global institutions, family offices and ultra-high net-worth individuals looking to invest into the Russian economy.
Born in Armenia into a family of scientists, David’s mother was a mathematician and his father was a physicist. He received his primary education in his home town of Yerevan. After receiving a scholarship, David studied at the prestigious Trinity College in New York before continuing his studies at the Miami University of Ohio, where he obtained a Bachelor of Science in International Business and Finance. He subsequently worked in fundamental value investing at Alliance Bernstein, wealth management at Citi Group and then trading at Troika Dialog. During his experience, David developed a true love and interest in stock picking and event-driven investment.
Today, David Amaryan has continued to expand Balchug capital by developing new funds.
Where did the idea for Balchug Capital originate from?
Ever since starting to work in financial markets, I knew that one day I would establish my own firm. 2009-2010 seemed like the perfect time to do so. Following the financial crisis, I felt there was still a pool of untapped opportunities. So I left Troika and started Balchug.
What does your typical day look like and how do you make it productive?
From a young age I have always had a passion for combat sports. A productive day for me will usually start off with an early morning training session followed by a healthy breakfast which will set me up for the day with my family. I have two daughters and a son whom I try to spend as much time with as possible before going in to the office to start the working day.
How do you bring ideas to life?
I have an entrepreneurial streak coupled with a true passion for building businesses. Bringing an idea to life requires commitment and willpower but crucially organisation. If I have a specific project in mind, I will first strategise and think of the right people to bring on board to help me achieve my goal. I strongly believe in team work.
What’s one trend that excites you?
I specialise in identifying event-driven investment opportunities. Event-driven investment is a particularly attractive approach because, when executed well, it has the potential to deliver attractive uncorrelated returns.
We are also finally seeing increased interest in the Russian capital markets. Foreign investors are getting used to the prolonged period of sanctions and starting to pay attention to the very attractive valuations in the market. We believe that this trend will continue.
What is one habit of yours that makes you more productive as an entrepreneur?
Discipline I believe is key. Not only for consistency in delivering results, but also to surpass your limits everyday.
What advice would you give your younger self?
You have to seek out opportunities before others discover them. Taking calculated risks in the business world teaches us invaluable life skills such as strategic thinking and contingency planning. You’ll never know if an idea will be a success until you take that risk and go out of your comfort zone. Doing so gives you a chance to learn and progress within your chosen career path. However, as mentioned, the risks need to be carefully calculated. That is what I would advise my younger self.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Testing my limits and always finding challenges. I hate to stagnate, and I find that challenging yourself as an individual, whether physically or intellectually, is key to continuous growth and improvement.
What is one strategy that has helped you grow your business?
Taking calculated risks. When I was working at the trading desk of Troika Dialog, I learnt how to make informed decisions and assess risks for my clients. When I set up my own fund, I wanted to make sure to replicate that. Event-driven investment has an element of calculated risk in it. Striking that balance is key in making profit for your clients, but also ensuring their capital is not at risk.
What is one business idea that you’re willing to give away to our readers?
Since I manage hedge funds, I will give you a couple of stock ideas: one international and one Russian.
Mazor Robotics is an Israel-based manufacturer of automated spine surgery systems. Robotic-assisted surgeries have clear advantages over hand-performed and there is a steep growth in number of operations performed in assistance with robotic systems. In 2016 Mazor entered in partnership with Medtronic which now accumulated around 11% of shares. We believe Mazor will enjoy growth from increasing demand for robotic surgeries. Also, Medtronic strategic interest in Mazor may result in its acquisition.
Tatneft is a leading oil and gas company with brownfield projects in Russia. According to new dividend policy the Company returns 50 – 75 % of Net Income as a dividend; in practice, payout ratio is close to 100% of FCF, implying 12% Dividend Yield per preferred share. Tatneft shares demonstrates low volatility in comparison with all other russian oil & gas stocks.
What is the best $100 you recently spent? What and why?
Probably presents and toys for my children. I travel a lot and unfortunately I don’t see them as often as I would like to. As such, I really enjoy going shopping with them (although I definitely spend more then $100).
What is the one book that you recommend our community should read and why?
A lot of good books to recommend, but a recent one I read which I thought was quite good was “Superforecasting: The Art and Science of Prediction”.
What is your favourite quote?
There are a lot of quotes that I like. Here is one of my favourites:
“It always seems impossible until it is done” – Nelson Mandela
Balchug Capital on Facebook: https://www.facebook.com/pages/Balchug-Capital/2033481276916142
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