American Capital (ACAS), which as I write trades above its last-published NAV after trading at a substantial discount for some months, announced today that it is opening an office in Hongkong.
Just to be clear: ACAS isn't announcing the launch of an Asian analog of European Capital. ACAS is announcing that ACAS has opened an Asian office, (a) to help existing portfolio companies access Asia, and (b) to establish relationships with Asian institutions. ACAS is thus targeting Asia with expansion efforts (a) targeted at the businesses of its portfolio companies (which might benefit from better relationships with Asian customers and suppliers), and (b) targeted at growing its funds management business. It's this second thing, growth of funds management business, that will eventually give rise to an Asian subsidiary that does for Asia what European Capital does for Europe. That's not today's announcement, however.
ACAS appears to be executing nicely. ACAS hasn't paid a fortune for an Asian equity boutique, but is building at modest cost using organic growth methods. If and when ACAS develops meaningful Asian funds management business, it will do so at low cost -- to the benefit of existing investors.
Since ACAS is trading above last-published NAV, it is unable to use the stock buyback authorization even if a window opens in which the company isn't barred from making purchases. I have a faint hope that ACAS made some purchases while the stock was in the toilet, but based on past performance I expect most of the quarter has been spent in a trading blackout.