Value investing backed by in-house research
Being stock-pickers and value investors we focus on active investment management in Emerging Europe. We devote our time and energy on generating investment ideas through in‐house proprietary research of 250 listed Emerging Europe companies, backed by regular meetings and contacts with company managements.
We invest in attractively valued companies in Emerging Europe with an objective to deliver positive risk-adjusted return over the market cycle. This is achieved by constructing a portfolio of companies that maximises the aggregate upside to internally set target prices of individual companies taking into account quality and ESG characteristics of a company, liquidity of an instrument and FX outlook.
We follow the principles of value investing and evaluate every investment case on a standalone basis. Portfolio construction is based on stock-picking, thus fully bottom up. We have a long-term holding philosophy but our investment process may force us to take advantage of short-term market movements. We tend to invest into well managed companies with leading market positions and with strong recurring revenue streams. We only invest into companies with business models that we understand and can model ourselves.
We have followed the principles of value investing and stock-picking since the launch of Avaron in 2007. Over the years we have elaborated our investment process. After the 2008-2009 financial crises we pay special attention to liquidity risk across all our portfolios. Starting from May 2011 we invest based on internally set target prices. In March 2012 we introduced in-house SRI screening and we launched our quality scorecard to determine the quality of investee companies likewise in 2012. Since 2018 we pay even more attention to ESG matters as we developed our comprehensive scorecard entailing both qualitative and quantitative criteria covering environment, society, supply chain and governance issues.