A stringent investment process and consistency of style by conviction
For us and our investors, what counts is focusing on the absolute, positive return – through sound, well-researched investment decisions.
We see stock-picking as one of the few opportunities to achieve above-average high returns even under challenging conditions: we look for undervalued companies and hence for opportunities that our fundamental approach allows us to spot sooner than the market in general.
That’s why our approach is both consistent and comprehensible. This gives us and our investors security – because we know the relevant investments so well and so reliably that we don’t get nervous when the market goes through critical phases.
The decisive factor, in our view, is the discrepancy between the current market value of the company and its long-term value – and not the asset category to which it belongs: we invest regardless of size, indices and sectors.
Our investment approach is “bottom-up” fundamental analysis.
This analysis focuses in principle on three aspects:
1. The business model
2. The management team
3. The valuation
We identify the relevant value drivers and apply appropriate valuation models for the company. Our network gives us access to the management of the companies – giving us information at first hand. We hold more than 250 meetings with companies every year.
The quality of our analyses is achieved through care and stringency – and not least by our many years of experience in what we are doing. Our fund managers, Martin Wirth and Raik Hoffmann, can each look back on more than 20 years of practical experience in their field.
Our process for determining the right time to sell is also clearly defined, consistent and comprehensible: we constantly review and adjust our valuation.
We diversify, but remain focused – because our investment process gives us confidence in the target companies.
Attractive returns AND an attractive risk-return profile
We aim for an absolute annual return of at least 10 % from every single investment. This would be a return over a longer period that far exceeds those of many other investment strategies. Investments that were taken out on the basis of fundamental analysis also tend to present a lower risk: after all, you have a better idea of what you are actually investing in. That means less mental reliance on fluctuating market trends and price movements that often do not reflect reality.
We firmly believe that value investing will pay off in the future as it has in the past. The only economic reason for taking out an investment is to achieve a sustainable return. That makes it essential to pay a price that is below the long-term value. The short-lived fads that are associated with overvalued shares often enough lead to long-term losses.
Our focus is placed entirely on the company, its business models and management and its valuation. How these develop can be much more easily assessed than global variables such as exchange rates and interest rates, which change frequently, are difficult to predict and have an influence on company performance that is often over-estimated. With us, you are investing in what we consider to be the most easily calculable and hence most successful analytical approach over the long term.
We deepen our knowledge of the companies through regular discussions with their management teams, allowing us to find out and broaden what we know not only about their current situation but in particular about long-term trends. That is the prerequisite for achieving good results.
Both our fund managers, Martin Wirth and Raik Hoffmann, each has gathered more than 20 years of experience in German equities – and with it critical knowledge of companies, markets and market situations and the best possible way of dealing with them. Their network also gives both of them access to the relevant sources of information.
Each of our funds is managed by a lead and a co-fund manager. The four eyes principle gives you an additional expert appraisal of your investment: every buy or sell decision that is taken by the two fund managers requires a consensus that enhances the quality of the decision because of the different perspectives that are adopted.