Active Ownership Capital Fund (BUY)

Disclaimer. This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!!

Background:

More than five years ago I wrote about why it could make sense to invest into other actively managed funds even if one considers oneself an active investor. I would summarize the criteria that were important to me as follows:

The interests of the manager should be long term aligned with investors and the manager should possess specific skills to complement the own portfolio as well as to enable some learning.

My first and only fund investment soon thereafter was the TGV Partners fund managed by my friend Mathias. Looking at his latest letter, my portfolio (+48,8%) performed pretty much in line with his portfolio (~+49,5%) since his Fund’s inception, however with one big difference: In real life, I paid a significant amount of taxes whereas my stake in his fund has been compounding on a gross basis (adjusted for some German tax specialties).

In addition, I have been learning a lot from following his letters and I think without this influence I would still mostly try to find investments below book value and performance would be a lot worse.

The Active Ownership Capital (AOC) Fund

AOC is a fund which is pretty unique in Europe: They specialize in “activist” value investing. This means that they are not only buying a significant stake in undervalued companies but are also actively pushing for change via different means, like board memberships etc. Normally this is the domain of Anglo Saxon players like Elliott, but AOC has established already a very decent track record in recent years.

Some readers might recall, that I followed AOC already 2 times into an investment: Stada and more recently Agfa Geveart.

Their performance since launch has been nothing short of spectacular: Since inception (31.12.2015) 10.000 EUR would have increased to 31.011 EUR as of June 30th 2020. Annualized this represents a yield of 28,1% after fees.

To be honest, I do not expect a similar performance going forward, especially as due to their investment style, performance can be “lumpy”.

As an “activist” fund they need to be of course tougher than a pure passive investor, but so far I have not seen any Carl Icahn style “Greenmailing” from them, where companies pay money just to get rid of the activist guys.

Being invested and following them even closer, I do hope that I can learn a lot here which I could then apply to my “special situation” bucket. So far I have been mostly active when actual bids were made, but going in earlier might make sense.

Additionally, with many non-digital companies struggling at the moment, I think there is ample opportunity for AOC going forward and the number of potential targets is increasing due to Covid-19.

Therefore I assume to have allocated 5% of my virtual portfolio into the fund at end of June 2020 at 301.1 EUR per unit.

Disclosure/Warning:   The fund is targeted toward professional investors and doesn’t have a retail share class. For anyone who is going to invest because he read this or subsequent posts on my blog I have negotiated my “standard kick back” with AOC: 1 beer per new account in a pub of my choice.

 

 

 

 

 

22 comments

  • George Basten

    AOC is not far from Prosus, a great addition In Rob’s fund.

  • Hi mmi, does the investment mean, you are going to overweight special situations or is it a replacement of GSG? Also are you still posting about special situations in the future or less from now on.

    I appreciate your blog for quite some time

    • No, it does not mean an overweight per se. I have no fixed weights for special situations anyway. And of course I will post about special situations going forward if I do find attractive ones.

  • Mmi portfolio is really big. You can collect sparse information across the blog and you may conclude 8 digit. Why is he so secretive otherwise ?

    • May I add that the blog portfolio is a virtual portfolio before you speculate on my 8 digit wealth ?

      • i was wondering how big is the real portfolio and from info in one of the posts it is clear that it is 7 digit size

      • Of course you can add whatever you like. Feel at home in your own blog !! 😛

      • Ist schon klar, dass es virtuell ist.
        Ich sehr nur die Problematik, dass wenn ein Mindestinvestment von 500.000 Euro verlangt wird (mir wurden sogar
        5 Millionen genannt) und dieses Investment 5% des Portfolios betragen soll, bei der dann benötigten virtuellen Portfolio-Mindestgröße ein Investment in viele Portfolio-Investments (kleine, marktenge Werte) in der Realität kaum möglich ist.
        Ansonsten auch von mir mal wieder ein Kompliment: Ich schätze den Blog sehr.

        • Danke für das Lob.

          Tja, manchmal muss man Kompromisse machen. Vielleicht sollte ich weniger für das Blog verlangen wenn nicht jeder das Portfolio 100% nachbilden kann 😉

        • A psy & behavioural analysis indicates with little doubt that portfolio is not virtual…

        • A quick look into my brokerage account says that there is some overlap 😉

        • Niemand kann das Portfolio nachbilden:
          Wenn genug Geld da ist, kann man nicht in die kleinen Werte investieren.
          Wenn zuwenig Geld da ist, kann z.B. nicht in AOC investieren.

  • Hello, is it possible to but only a few units of AOC, or is a minimum required? Thanks

  • Rainer Müller

    tja … hab ich gemerkt ! 500 mille sind ihnen zu wenig

  • Nice kick back, communicated transparently 😉

  • What a coincidence, that I wrote in your comments today about another very interesting AOC „project“: The merger of Vita 34 and Polski Bank Komórek Macierzystych

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