Jan 2023: TSMC – Surfing USA

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TSMC – Surfing USA

January 2023 (ADR) $96

 

Post our published piece on TSMC last year we have been researching the company in greater detail. As a result, we share with clients numerous reference pieces we think you should be reading to better understand the company. The last page of this note includes links to many of these. What follows is some reflection post this further study.

Mental models – The secret weapon of those of us with more moderate IQ’s

We have been to many a Berkshire AGM and listened to Charlie Munger talk about mental models. We have also followed his books and writings on the subject closely over the years. Indeed, when your author is asked to say what differentiates Holland Advisors analytical approach from others, he answers as follows. “Most other analysts look at investments by sector or geography, we look at them by mental model or business model.” We seek out those models we have seen successfully used before in maybe a new marketplace. Munger once spoke of the fun you can have with mental models using them to outthink those with higher IQ’s. This to us is clearly an appealing prospect. Indeed, we think it likely that almost everyone that has ever penned a research piece on TSMC will have a higher IQ than your author. As such we are about to try and put Munger’s idea to the test!

We have now spent a good amount of time on TSMC. The more pages we turn, the more we like it. Numerous mental models come to mind as we study it. The first is one we heard Charlie describe when he was once discussing Google. He talked of “surfers and wallowers” i.e. if a business is surfing in front of a wave (having found some form or advantage; scale, technological or otherwise), no competitor franticly paddling behind it is going to be able to catch up. In large cap tech there are plenty of examples of such situations: Google’s search engine, Microsoft’s Windows, Apple IOS etc. Most such business are priced by markets reflecting these advantages however. Investors, we think should pay attention when they are not priced as such. Today TSMC looks a good example of a business that is surfing further and further away from competitors, but it is not priced for the likely outcome that will result.

We conclude that TSMC has:

  • A growing scale and process advantage
  • Improved competitive tailwinds
  • Regulatory assistance
A growing scale Lollapalooza

In our first piece we noted that we saw TSMC as a rare example of one of Hamilton Helmer’s 7 Powers, i.e. a process power company. The more we have studied this part of TSMC’s service offering the greater our conviction has become. It is clear listening to TSMC management past and present, that its advantages are not single source (i.e. a brand or lowest units cost). Instead, they are multi-faceted. Some being tangible (availability of newest technology, the ability to afford it and R+D dollars).

Many are however intangible. Examples of this would include long standing customer trust and the ability to constantly attract the brightest minds in the sector to make them want to work for TSMC. Also a designed system of continuous improvement so such staff feel free to create and challenged to stay at the leading edge of their industry technology’s advancement. Each of these factors in isolation might not make TSMC such a formidable competitor. It is their combined effects that really create a powerful Sustainable Competitive Advantage. Lollapalooza.

A mixture of these tangible and intangible factors can be seen in the company R+D expense. At c.7-8% of revenues this clearly rises in absolute dollars as the group’s revenue grows. However this only explains a part of the companies R+D advantage. As every advanced chip designed in the world (ex-Intel) pretty much uses TSMC for manufacturing, its client base has almost all of the best and brightest ideas/minds in semiconductors. That TSMC engages in much R+D with clients allows it to deliver great win-win scenarios to customers, whilst staying at the forefront of chip manufacturing innovation. Client chip ideas can be worked on and helped funded by the supplier they trust the most. As we observe below the same collaborative thinking and development is not today available to any Chinese would be competitors. Seemingly not to Intel either.

Improved competitor tailwinds

Another mental model we have learnt from our Buffett studies is the pricing power that can accrue to a business if it is a survivor in a market that consolidates from say five players into three, or three players into two. Indeed, this was the thinking that lay behind much of Buffett’s investments in newspapers during the 1970’s. If there were two highly competitive newspapers in a city and one went under/was consolidated, the remaining one was a money printing machine with far greater long term pricing power over advertisers. This same model we have used in our analysis of Sports Direct in the UK (with JJB going bust, only JD Sports remained), hence why Sports Direct/Frasers can now take pricing up… #“where else are they going to go”. This thesis has also played out in the US airline market, which post much consolidation today sees far less discounting. Instead today the sector enjoys higher fares/profits. It will be the same factor that drives RyanAir’s future profitability also.

First AMD and now INTEL…. Running hard to stand still

The more we have read about the recent history of company like TSMC and its sub-sector of semi-fabrication, the more we see this sector consolidation mental model in action. Massive consolidation has already occurred resulting in a very small number of remaining players. The background of AMD and its spin out of what become Global Foundries is instructive. Despite a long-held desire to hang on to in-house fabrication in the end the economics of the division forced its spin out. Then the stand alone cost of such an independent company keeping up with the likes of TSMC hampered it further. Just a few years of sub-scale investment vs an industry leader in such a fast advancing industry can leave a company behind in a way it has no hope of catching up from. This was the fate of Global Foundries.

Arguably the same fate, or similar transition is now occurring at Intel, albeit in slow motion. We observe that Intel lost the scale war against TSMC many years ago. It then also arguably went on to lose a skill war in the last 2-4 years as a good number of its highly respected engineers left the company. That this occurred as the company was being run more for profit stabilisation/maximisation rather than innovation for the benefit of future customers has now been revealed. The result was the recent (2021) re-hiring of a more technological focused CEO to revive the company’s production abilities. Only time will tell as to how successful he will be. Arguably the cards are stacked against him. Even just to make such a conclusion against a company like Intel, once the gorilla of its industry, speaks to the power of market position TSMC now displays.

Importantly such big changes in the status, scale and skillset of Intel only occurred quite recently (last 2-4y). Looking at the resulting challenges Intel now faces in the context of the very long investment periods TSMC have undertaken investing in plant, IP, R+D and staff would suggest any fab production recovery at Intel will be a long time coming. In addition, arguably all Intel’s current actions are designed to achieve is a maintaining of its current status quo i.e. to be able to remain a chip manufacturer as well as a designer. As such a, perhaps unlikely, success achieved by Intel in rebuilding a leading edge chip production ability would not impact TSMC negatively, as its market share of chip production would stay the same as today. In contrast were Intel to fail in such a challenge and finally outsource manufacturing to TSMC, as was mooted in 2020, this would be a huge benefit to TSMC. Such an endgame for Intel would not just give a short-term fillip of further scale to TSMC. It would arguably gift it a scale and technological lead that could last for decades. Its manufacturing advantage would surely then be assessed as almost unassailable.

China competition threat: Dead on Arrival

Our reading of Chip War[1] helped our understanding in the area of potential Chinese competitor threats a great deal. What we think is important to recognise here with reference to the TSMC competitive environment is not that a visible powerful competitor has been undermined. Instead, it is that any ability to create a future competitor has been stopped before it even had chance to succeed. That a priority of Chinese policy was/is to be a leader in leading edge technologies’ is widely understood. A such the Chinese state (by fair means or foul) has engaged in a determined multi-year effort to try to takeover, copy and/or build the necessary skills it needs to design and produce leading edge semi-conductors. The recent US Government policy has not only stopped US chip design/technologies being exported to China, it has also spread that constraint to Dutch and Japanese important parts suppliers. This has effectively meant the idea of any Chinese backed production of advanced semiconductors is dead before its arrival.

To achieve such production excellence under a China state sponsored/supported entity would never have been easy even with access to US technology hardware and software. This is due to the long term learned skill base and industry co-operation required to do so. Without US/Dutch technologies a Chinese semiconductor manufacturing company, be it state backed or not has zero chances of success. With access to huge capital, long time frames for potential success and availability of US technologies, building a Chinese competitor to TSMC would not have been easy, and even if successful might still have taken c. 10 years. Now any such threat looks dead.

3 becomes 2… Becomes 1?

The combination of a much-weakened Intel and a dead-on-arrival Chinese aspirations to establish a new well-funded competitor we think are powerful factors. Both of these events are arguably quite recent in their occurrence – (Intel exodus of talent occurred in 2020 leading to the change of CEO, appointed Jan 2021 and US CHIPS Act was only enacted in 2022). However the implications from these changes to any investor assessment of TSMC we think are long lasting. Whilst TSMC was clearly already the leader by far in this field, Intel’s efforts show how hard it is even for a past market leader to catch up, despite being very very determined to so do. (#Surfing vs Wallowing).

That a global state venture of prominent ambition, funded by the deepest pocket in the world might now also have to accept failure in its challenge is important when considering what TSMC’s competitor positioning might look like ten or even twenty years out. In another industry where the competitive advantage is say a brand or current technology such moments might not matter as company’s SCA may change in time. However, when your advantage is due to the use of scale and process power the ability for future competitors to catch you becomes reduced, maybe significantly so. Such missteps by competitors/good fortune in policy changes are today we creating potential gulfs in the size of TSMC relative moat size in the future.

TSMC meet Amazon

In our Amazon work we were impressed by its fixation not on its competitors but instead on the customer.

We’re divinely discontented with customer experiences, whether they’re our own or not. We believe these customer experiences can always be better, and we strive to make customers’ lives better and easier every day Andy Jassy, our emphasis

“We seek to be Earth’s most customer-centric company. We are guided by customer obsession rather than competitor focus Jeff Bezos, our emphasis

This same customer centric approach exists inside TSMC. Whilst its founder (Morris Chang) has now once again stepped aside, the culture that he ingrained seemingly remains strong inside the company. A healthy paranoia of complacency clearly exists:

“Improve every year or you will be eliminated”. TSMC CEO November 2022

This is also evidenced not just in its internal culture but in its relationship with customers. Customers clearly love TSMC, particularly its responsiveness. Its consistent customer feedback surveys and the transparent way TSMC runs open customer relations give an insight into why customers feel this way.

We are a service business not just a production business” TSMC CEO FY 2021 analyst call

Maybe this culture can also be seen in the CEO’s recommendation of a business video to watch to better get a feel for the company’s culture and strategy. In a presentation last November he cited: ‘Why the mighty fall’ by Jim Collins. This is clearly a company that has internalised Munger’s view on corporate death.

“Work out where you are going to die… and never go there”. Charlie Munger

We reassert a few points we made in notes on companies like Schwab and Amazon. This being that a huge commitment to give the customer great service and great prices has multi-faceted outputs. It means that a customer is pleased with you and gives you more business. That customer also tells their friends of your combination of service and value and they give you new sales without a need for marketing or gimmicks. There is a third element/effect of these customer centric actions however… the effect it is having on your competitors.

Not only if customers are switching to you are you gaining more scale advantages, but such a move is taking important scale away from your rivals. In turn making any dis-economy they already possess even more painful. In short, if you are struggling to compete with a business-like Amazon, Schwab or TSMC today, tomorrow will be worse!

Observing TSMC competitors in the last few months we see big recent-year changes in a weaker Intel and much weaker China state-funded ability to compete. What we also see however is how the Scale Economy/Process Power model of TSMC presses its advantages home. With each ratchet up in scale they deliver yet more value, more innovation and service to customers. Buffett often talks of ignoring many other metrics and just asking yourself “is this company’s moat narrowing or widening?” In steady state TSMC’s moat looks wide today. The interesting bit is it seems set widen more and do so for many years to come.

Regulatory tailwinds

Arguably much has changed in the regulatory environment for TSMC in recent months. Whilst we have addressed some of the knock-on competitive impacts of The CHIPS Act above it was clearly started by regulatory/retaliatory actions.

The war of words and then trade that broke out post the US accusing China of stealing its technology/IP is interesting. Alarming as it may read to some, these events are not without precedent. Again we thank Chip war for the insights it gave us here. The same copying/stealing took place by the Soviet Union many years ago. It was notable then that such an approach did not foster the internal innovation the USSR aspired to create. The opposite occurred with a greater reliance on US technology as a copying mentality outweighed one of internal innovation. Arguably evidence of China’s efforts is this regard are yielding a similar outcome today.

We note the innovation that can be achieved with trusted employees in partnership with long-standing suppliers/customers is very hard to foster/replicate in a state sponsored environment where the same parties do not have an equivalent level of trust. This is notable in China today, i.e. seemingly they just cannot replicate voluntary/commercial networks of deserved trust that exist between US/EU counterparties. Whilst this is not a piece extolling the virtues of capitalism and free markets, this appears to be a real-life example when even a well-funded and organised planned economy just cannot compete with open architecture entrepreneurism.

We observed in our first piece that the US CHIPS Act’s global enforcement, whilst not of TSMC’s political choosing stands to help it greatly. (Indeed TSMC tries very hard to be politically neutral). Its impact however is something that will be a long-term beneficiary to TSMC by the weakening of Chinese competitors as we observed above and the de-facto establishing of TSMC as the global gold standard in semi-conductor production. On this last point we note that very few companies breaking ground on a new US factory get both the Apple CEO and the US President turning up for the opening!

We would also now obverse the contrast between TSMC and other global technology companies from today’s starting point of regulatory risk. Many large tech businesses like Amazon, Meta, Apple and Alibaba are seeing far higher regulatory scrutiny of their activities with overseers looking for areas where a monopoly has been abused or just allowed to get too big. Against this backdrop TSMC is being courted with tax incentives by multiple jurisdictions. The 2022 US CHIPS Act penalised its would be Chinese competitors, while at the same time offering generous tax breaks if the company opened operations based in the US. This was soon followed by a new Taiwanese tax incentive tax package of their own. It is clearly designed to ensure the bulk of TSMC research and development stays within Taiwan (the effect of which is TSMC’s current temporary 10% income tax rate, will now become semi-permanent). Lastly a tax incentive of some form by the EU to attract a fabrication plant to mainland Europe is seemingly on the horizon also.

What goes wrong?

As we have reflected more on TSMC we make a few observations on why our positive thesis might not pan out.

Political risk

Much is written on the China/US relationship and the important geographic position that Taiwan plays within that. We feel our view in this area can add relatively little. We only reflect that current trade relationships and indeed the relationship of China with investors more widely is strained currently. Whilst we see some signs of a thaw in US/China relations (see FT pieces below) these of course can be wrong. With US/China trade tensions elevated and the Russian/Ukraine conflict bringing Taiwan into the spotlight again at least maybe risks are properly considered and we suggest fully discounted as a result. To consider the financial model of TSMC and its ability to still be able to invest future capital at high rates in isolation, is to see a wonderful business model of high ROIC and plentiful ability to deploy more capital at similar to historic rates. What might such a company be valued at were based in another geography/had less political risk. We will suggest =/> 20x earnings. If we accept 2023 as a weaker year in the semiconductor cycle and instead look to 2024, we find TSMC expected to report $6.9 of EPS per each ADR. The resulting PE, even after the recent share price pop-up is 13.7x. This clearly shows a sizable risk discount is priced into the shares today already (we note looking at the companies past PE’s it has often been at much higher multiples). Today’s lower multiple is despite record high levels of return on capital and high gross margins.

Future fading returns

If you want to understand Mr Market’s current concerns, we recommend listening to the recent full-year analyst call. Whilst there are discussions on different product rollouts and the outlook for the 2023 semiconductor cycle, another item clearly leads analysts thinking. This is the potential declining returns on capital that will result from investments being made outside Taiwan (i.e. in the US/Europe). Clearly the company’s past discipline in sticking with its home market for a low and consistent cost of production is something investors have gotten used to. Today they are being told by TSMC that the build cost of plant in Arizona is 5x that of one in Taiwan. Although this does not seem a like-for-like comparison, clearly there is a higher cost of build outside Taiwan and the company admits this fact. It also admits how important the company is to its customers and how these customers now want some of the semiconductors they buy to be able to be sourced locally to them. Investors are worried this will lead to an uneven marketplace and in time lower returns on capital – they might be right of course. When questioned, the company admits that it will seek to balance these higher upfront costs with:

  1. some internal efficiencies
  2. by using the tax breaks new geographies offered to attract the investment and
  3. with the prices paid for these locally sourced semiconductors likely needing to rise.

Whilst none of this makes for easy modelling, it is easy to see both sides of the argument i.e. by investing in high cost countries you will lose your competitive strength. Alternatively clients are asking for this sourcing and saying they will pay for it, so as a client/service orientated company there is a point you must align yourself with their needs. We are unclear on how this ends up and will admit to some worry. Five years from now, a government or company that promised premium prices for locally sourced chips no longer wants play ball. Equally we are comforted by:

  1. that the company has pointedly reasserted its gross margin and ROE targets despite the admission of higher overseas costs;
  2. also that as the group observes it might one day get to c.20% of semis being produced outside Taiwan. This speaks to how big and growing its Taiwan operations will still be. This should ensure that were a credible alternative supplier to one day emerge TSMC still has c.80% of its capacity still on equivalent to lowest unit cost.
Price is what you pay, value is what you get

In our first piece we outlined the scale of compounding that TSMC has been able to achieve in the past. All of it, we note at high returns on capital. Also, that it/ the sector are suggesting another multi-year wave of growth is now ahead. The result of this is an ability to again deploy huge amounts of capital at still very exciting ROICs. Indeed as we roll the company’s likely financials forward it is the absolute quantum of profit the business might make we are attracted to, rather just the percentage ROIC it might report. Systems like Holt et. al. don’t like ROIC declines (if that is what might occur). The reason being is as a measure it often points to a new competitor or some weakening in the company’s business model. Were TSMC to grow at the rates it suggests in the coming years (15-20%) and were the ROIC it reported to have faded a little due to a few overseas investments that its clients requested, is that a problem for investors? That depends. If there are signs of wider weakness in the companies SCA, then maybe. However, everything else we are analysing about this company points to a strengthening not weakening position. Were such absolute profits to have grown strongly but return levels to dip a little we still assess the shares will be far higher than today. That is a Put Up More To Make More model.

Investor returns will also be a function of the price they have paid. A glance at the group’s past multiples show that rarely have they been as cheaply rated in these last 6-12 months and yet the growth and future ROIC prospects are still excellent. Price is what you pay, the value of an amazing, maybe even unassailable market position with strong compounding prospects is what you get.

Please do take a look at our original piece and the many links to useful documents and videos below.

New reading

The above reflections should be read in conjunction with our original piece – Holland Views: What does Warren see (December 2022). These thoughts came from the following sources. All we think are time well spent for those researching the company.

Read Chip wars by Chris Miller.

We have suggested this book a few times now. I had not finished it when we published our first note. It is both interesting as to the history of this sector/company. It is also very informative and up to date having only been published in 2022

Listen to Morris Chang

The founder of TSMC is interviewed in this link. It seems this interview has informed more than a few podcasts we have listen to on TSMC. So it is important to hear the message from the horse’s mouth.

Listen to current TSMC CEO Conference speech last autumn

Current TSM CEO Mr CC Wei spoke at a conference in Taiwan last autumn. Whilst it is translated the translation is far from perfect (I am looking for a link to a better one). That said it still provides a great insight into the companies thinking on sustainable competitive advantage and the evolution of the semiconductor market.

List to the company’s most recent year end conference call with investors

This is also an important listen, particularly with reference to whether the planned deployment of capital outside Taiwan will/will not change the company’s financial outlook.

Read some of the recent FT articles on China

They suggest, a thawing of relations between US + China

https://www.ft.com/content/e592033b-9e34-4e3d-ae53-17fa34c16009

https://www.ft.com/content/f6c47c54-b928-46ee-aa63-fb903e74b2e6

These downloads from HBR (and elsewhere) were also helpful

https://store.hbr.org/product/the-tsmc-way-meeting-customer-needs-at-taiwan-semiconductor-manufacturing-co/610003

https://www.hbsp.harvard.edu/product/W25607-PDF-ENG?Ntt=

Kind regards

Andrew Hollingworth


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  1. Chip War: The Fight for the World’s Most Critical Technology by Chris Miller

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TO THE FULLEST EXTENT PERMITTED BY LAW, HOLLAND ADVISORS (LONDON) LTD ACCEPT NO LIABILITY TO YOU OR ANY THIRD PARTY FOR ANY LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT DAMAGES, CONSEQUENTIAL OR SPECIAL DAMAGES, LOSS OF USE, DATA OR PROFITS, COSTS OR EXPENSES INCURRED OR SUFFERED BY YOU OR THIRD PARTY, WHETHER IN CONTRACT OR DUE TO NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF OR IN CONNECTION WITH THE ACCESS TO, USE OF, RELIANCE ON, OR PERFORMANCE OF THIS WEBSITE OR ANY INFORMATION CONTAINED ON THIS WEBSITE, WHETHER DUE TO INACCURACY, ERROR, OMISSION OR ANY OTHER CAUSE AND WHETHER ON THE PART OF US, OUR SERVANTS, AGENTS OR ANY OTHER PERSON.

NOTHING IN THE TERMS OF USE EXCLUDES, RESTRICTS OR MODIFIES ANY CONDITION, WARRANTY OR LIABILITY WHICH MAY AT ANY TIME BE IMPLIED BY STATUTE OR ANY OTHER APPLICABLE LAW WHERE TO DO SO IS ILLEGAL OR WOULD RENDER ANY PROVISION OF AN AGREEMENT VOID.

8. Third Party Websites
We may provide, on our Website, links to websites operated by third parties as a convenience to you. If you use these other sites, you will leave this Website. If you decide to visit any linked site, you do so at your own risk and it is your responsibility to take all protective measures to guard against viruses or other destructive elements.

Holland Advisors (London) Ltd makes no representations, warranties or guarantees of any kind about any of the content of any other website which you may access by hypertext link through this Website. When you access any other website by means of a link from this Website, you should understand that your access to that other website is independent of Holland Advisors (London) Ltd and Holland Advisors (London) Ltd has no control over the content of the website, nor does Holland Advisors (London) Ltd in any way endorse or approve the content of that website. In no event will Holland Advisors (London) Ltd in any way be liable to you or any other person(s) or organisation(s) for loss or damage (whether direct, indirect, consequential, special or other) for any use of any site linked to it by means of hypertext or otherwise.

9. Indemnity
You agree to indemnify Holland Advisors (London) Ltd and its officers from and against any claim brought by third parties against Holland Advisors (London) Ltd and its officers as a consequence of your breach of the Terms of Use. Furthermore, if your use of this Website results in the need for servicing, repair or correction of equipment, software or data, you assume all costs thereof.

10. Intellectual Property Rights and Licence
The copyright, trade mark or any other intellectual property rights in the Website and the Information are owned by or licensed to Holland Advisors (London) Ltd. You may download or print out a hard copy of individual pages and/or sections of this Website provided you do not remove any copyright or other proprietary notices. Any downloading or other copying from this Website will not transfer title to any software or material to you. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link to or use for any public or commercial purpose this Website without the prior written permission of Holland Advisors (London) Ltd. Any rights not expressly granted in the Terms of Use are reserved.

11. Operation of the Website
You should be aware that the internet, being an open network, is not secure. If you choose to send any electronic communications by means of this Website, you do so at your own risk. Holland Advisors (London) Ltd cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely.

12. Privacy
Any personal data relating to you will be collected, used and recorded by us in accordance with current data protection legislation, the Terms of Use and our Privacy Policy. You must read our Privacy Policy as it forms part of the Terms of Use.

13. Governing law
The Terms of Use are governed by the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction over any disputes arising under them.

14. Waiver
If you breach the Terms of Use and we take no action, we will still be entitled to use our rights and remedies in any other situation where you breach the Terms of Use.

15. Our details
This website is owned and operated by Holland Advisors London Ltd. You can contact us at: Holland Advisors London Ltd, The Granary, 1 Waverley Lane, Farnham, Surrey, GU9 8BB.

Updated and effective as of  31st March 2021

Disclaimer

Please read the following conditions of use of this website.
This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority).

The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932).

This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside.

Information on this site
The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly.

Marketing Communications
Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy.

Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action.

Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures.

Fund Information
Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation.

Linked Websites
This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom.

Indemnity
You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information.

Use of Cookies
If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings.

Copyright, Trademarks and Other Rights
Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors.

Governing Law
You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.

Privacy Notice

This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at 7 York Road, Woking, Surrey, GU22 7XH.

 

Introduction

This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you.

In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’.

This notice applies to personal data collected through our website www.hollandadvisors.co.uk.

Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.

 

Data Protection Officer

We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.

 

Personal data we process

1. How we obtain personal data

The information we process about you includes information:

  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services

2. Types of personal data we collect directly

When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:

  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive

3. Types of personal data we collect from your use of our services

By using our website and our services, we process:

  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.

4. Our use of aggregated information

We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity.

For example, we may aggregate usage information to assess whether a feature of our website is useful.

However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice.

5. The bases on which we process information about you

The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category.

If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data.

If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information.

6. Information we process with your consent

Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data.

Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website.

We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists.

You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk.

7. Information we process for the purposes of legitimate interests

We may process information on the basis there is a legitimate interest, either to you or to us, of doing so.

Where we process your information on this basis, we do after having given careful consideration to:

  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so

For example, we may process your data on this basis for the purposes of:

  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so

 

How and when we process your personal data

8. Your personal data is not shared

We do not share or disclose to a third party, any information collected through our website.

 

Use of information we collect through automated systems

9. Cookies

Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date.

They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered.

They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors.

Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them.

Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate.

The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website.

10. Personal identifiers from your browsing activity

Requests by your web browser to our servers for web pages and other content on our website are recorded.

We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution.

We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.

 

Other matters

11. Your rights

The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data.

We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org

12. Communicating with us

When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need.

We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service.

13. Complaining

If you are not happy with our privacy policy, or if you have any complaint, then you should tell us.

When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint.

14. Retention period

Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested.

15. Compliance with the law

Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’).

16. Review of this privacy policy

We shall update this privacy notice from time to time as necessary.