Main Investment Themes
Disruptive Intelligent Automation
Based on AI, Robotics, and Cloud Digital Platforms
Alternative Energy/Greentech/Climate Change
How We Invest
The 3 main tactics of the fund are:
The importance of market inefficiency
We believe innovation as well is the key to long term growth. The opportunities that innovation creates are also often missed or misunderstood by traditional investment managers who are more focused on sectors, indexes, and short-term performance measurements.
We seek to earn attractive returns in equity positions by:
Leveraging our team’s global experience
Utilizing a bottom-up approach
Applying the in-depth industry knowledge of our experts and fundamentals scientists, while taking into consideration macroeconomic and market conditions
Our investment objective
Active bottom-up portfolio management without market cap, sector, or country bias
Quantitative and qualitative selection of 15-20 investment ideas, which have maximum absolute return potential
An optimum 20-stock portfolio size, allowing monitoring of the key drivers of long-term competitive advantages and profitability, searching for negative trends that impact business
No geographic or sector restrictions
In 2020, 30% biotech and 30% information technology (IT)
In 2019, 30%+ gold mining stocks in discretionally managed portfolios
We focus on generating alpha in the portfolio
Non-benchmark stocks can make up ~50% of the portfolio
Concentrated portfolio of 15-20 high conviction global stocks
Centering of the portfolio on the ten top ideas - core holdings, constituting 50% of the portfolio, with allocation between 5%-10%
Upside/downside ratio designed to deliver the right reward, e.g., paying $0.50 for $1 value
However, we will likely exit a position if 100% price appreciation is recorded AND a new position can be entered with the same risk/reward trade-off
We do not hide behind fancy quantitative variables based on back tests and history. We search for negative trends based on our fundamental analysis and industry expertise. We aim to exit a position before a negative trend in a company becomes known to market participants in general.
We exercise price discipline. Specifically, we manage the downside by not paying high multiples for growth stocks. In general, we do not pay more than 1.5 PEG for growth stocks. We buy ultra-growth stocks at the time of negative earnings surprises or market corrections.
Our risk management procedures allow us to minimize the fund’s drawdown during difficult times.
We manage fund liquidity
We calculate the probability of events and prepare for them, rather than reacting to events after they have happened.
We focus on the absolute return potential and risk management of the portfolio, instead of simply following academic guidelines.
Sustainability and creation of long-term value are priorities for us. We focus on companies, which have sustainable competitive advantage, compound their earnings over the economic cycle, and therefore increase the shareholders’ value.
Our approach to responsible investment is pragmatic. We do not use a tick-box approach based on companies’ sustainability reports as it results in mediocre performance in the long term. We exclude from our list companies that damage the environment or society, or that abuse corporate governance standards.
We invest in the companies where the management is fully transparent. We avoid companies we do not understand.
Historically, we have not invested in state-owned or politically exposed companies, nor companies with poor corporate governance as management teams are frequently inefficient, business decisions are often made based on political reasons, and in many cases management teams engage in unethical business relationships.