Matthews Pacific Tiger
Matthews Asia is a specialist Asian manager based in San Francisco. Pacific Tiger is its flagship fund, and aims to invest in high-quality companies for the long term. It is a high-conviction, low turnover portfolio with an emphasis on domestically or regionally-oriented companies that stand to benefit from the long-term evolution and growth of the Asian consumer. Although the fund can invest across all market capitalisations, it does tend to favour mid- and small-cap companies.
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Our Opinion
This is a core Asian equity fund run by a well-structured and well-resourced specialist team. We particularly like the fund's ability to differ from the benchmark and its aim to invest in long-term Asian winners. The focus on corporate governance, expert local knowledge and numerous company meetings are all reasons to think this fund will continue to outperform over the long term.
Fund Managers
Kathy Xu, Co-Manager
Kathy Xu is a Portfolio Manager at Matthews and joined the firm in 2026. From September 2023 to December 2025, she was Director and Head of North Asia Equities at APG Asset Management, where she oversaw a $3 billion North Asia all-cap equity strategy. Prior to this role, she served as Senior Portfolio Manager leading APG’s China A-Share Equity Fund from February 2018 to August 2023. Earlier in her career, Kathy was a graduate trainee at Aberdeen Asset Management and joined the firm’s Asian Equities team in 2007, and advanced to the role of Investment Manager in 2012 and went on to co-manage Aberdeen’s Chinese Equity Strategy and China A-Share Strategy from 2012 to 2017. Kathy obtained her Bachelor of Economics from Fudan University in 2006 and Master of Economics from The University of Hong Kong in 2007 sponsored by Swire scholarship. She is fluent in Cantonese, Mandarin and Shanghainese.
Mark Headley, Co-Manager
Mark W. Headley is Executive Chairman and Portfolio Manager at Matthews and rejoined the firm in April 2025. He first joined Matthews in April 1995 as Managing Director and senior analyst on the investment team. In 1999, Mark became President of Matthews and between 2002 and 2009, held both CEO and Co-CEO roles and between 2007 and 2009, he was also CIO. Throughout his time at the firm, Mark was a Portfolio Manager, which included the Matthews Pacific Tiger Fund, Matthews Korea Fund, Matthews China Fund, Matthews Japan Fund and the Matthews Asia Innovators Fund. Prior to joining Matthews, Mark held several key positions from 1989-1992 including with Newport Pacific Management and Newport Distributors, Inc. where he was an original member of the team that launched the first SEC-registered open-end Asia (ex-Japan) fund, the Newport Tiger Fund. Mark has appeared frequently in broadcast media, been widely quoted in major financial publications and participated in panel discussions at conferences of major financial institutions. He holds a B.A. in Economics and Politics from the University of California, Santa Cruz.
Risk
Risk is managed through very detailed research – typically 3 to 12 months on each idea. The team then builds a position slowly; only adding further once the company hits certain milestones. The fund has a strong bias to quality and is typically underweight more cyclical sectors such as energy, materials and technology. It is also more exposed to the Asian consumer than Asian exporters. As a result, Matthews Pacific Tiger may experience periods of underperformance in the short term, when low quality shares rally. Investors should also be aware of the currency risk.
Company Description
Matthews Asia was founded in 1991 by Paul Matthews and has since focused all its efforts and expertise within the Asian markets. It is the largest dedicated Asian equity specialist in the US and first made its funds available to non-US clients in 2010. The group was awarded the Elite Equities Provider Rating in 2018, 2019 and 2021.
Investment process
Matthews Pacific Tiger's investment philosophy is to ignore short-term macroeconomic issues and focus entirely on the long term. Matthews is deliberately based in San Francisco to remove the day-to-day noise of the Asian markets. However, the team makes regular visits to the region and see thousands of companies, including suppliers and customers of potential stock ideas.
Matthews has a large investment team from diverse backgrounds. The members have a wide range of local knowledge and speak 13 different languages between them. All fund managers sit with their team and work as analysts. The fund aims to buy high quality, capital-light businesses, which are typically more expensive than the index, but which have great potential for growth. Corporate governance is extremely important. The team spends 3-12 months working on each new idea.
Risk
Risk is managed through very detailed research – typically 3 to 12 months on each idea. The team then builds a position slowly; only adding further once the company hits certain milestones. The fund has a strong bias to quality and is typically underweight more cyclical sectors such as energy, materials and technology. It is also more exposed to the Asian consumer than Asian exporters. As a result, Matthews Pacific Tiger may experience periods of underperformance in the short term, when low quality shares rally. Investors should also be aware of the currency risk.
ESG
ESG - Integrated
While this strategy is not explicitly managed with a dedicated ESG mandate, ESG factors - particularly governance - are an important input into the investment process. From a portfolio management perspective, a critical component of meetings with company management is an in-depth analysis of the company’s corporate governance structure, philosophy and commitment. The team probes management’s thinking on business models, capital allocation, budgeting and utilisation, as well as future growth initiatives, competition and other issues. It seeks to develop a view on the integrity of management, its alignment with minority shareholders and ability to effectively manage the company through market and economic cycles. The analysis also includes a strong focus on certain factors which some investors consider to be “ESG” factors, but which Matthews considers “core” to understanding the sustainability of revenues, cash flows and profits, regardless of what label may be ascribed to this analysis. These factors include the commitment and ability of a firm to sustainably address labour matters, policy and regulatory requirements, customer interests, dividend policies, and minority shareholder rights.
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