Find out our management approaches for each asset class

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Our goals:

Maximizing returns and beating the benchmarks. The investment in CIIs is subject to market fluctuations and other risks entailed by investing in financial instruments. Therefore, the net asset value and returns obtained may vary both upwards and downwards and thus, an investor may not recover the amount originally invested. Pursuing to beat the benchmarks does not entail achieving it.

Active management:
 

• Identifying companies. More than 150 annual meetings with managers to draw attention to those companies with:
  • Clear specialization in their  activity.
  • Good marketplace positioning.
  • Strong shareholding control.
  • Management team with a long-term vocation.
• Fundamental approach:
  • Fundamental analysis of companies, calculating their fundamental discount and monitoring the life cycle of that discount.
  • Maximizing the fundamental discount of the portfolio at any time, as the main source of potential return.

Investment process

01 Identifying companies

Assessment of the robustness of the business and the competitive position of the company.

• Consistency of the business activity 
• Activity branch
• Field leadership
• Clear sources of profit generation
• Margin stability
• Sustainability of free operating cash flows
• Internationalization degree
• Adequacy of the financial structure

02 Qualitative Analysis

Analysis of the consistency of the management team through one-to-one meetings.

• Medium and long-term vision of the management team.
• Credibility of the management team. Quality Management
• Shareholder structure
• Analysis of the internal cycles of business activity

03 Fundamental Assessment

Analysis of profitability expectations.

• Sales Expectations, margins and results
• Analysis of the internal cycles of business activity.
• Valuation of the business Discount of operating cash flows
• Analysis of companies' fundamental discounts
• Discount Lifecycle Monitoring
• Quarterly review

04 Client Experience

Client Perception.

• Client Experience (whenever possible).

05 Building up a Portfolio

Portfolio optimization.

• Management "Bottom Up"
• Maximizing the portfolio's fundamental discount
• Low turnover
• Active Management: Wide Error Tracking
• Ongoing portfolio monitoring
• Monitoring of internal market cycles
• Portfolio liquidity test

Key objectives:
 

Protection and optimization of heritage

1st Limit the variability of net asset value in very negative market environments.

2nd Maximize profitability. Investment in CIIs is subject to market fluctuations and other risks inherent in investment in financial instruments, so the net asset value and returns obtained may vary both upwards and downwards and an investor may not recover the amount initially invested.

Differential approach:

Based on Behavioral Finance. The typology of market inefficiencies is detected and exploited:

• Universal character.
• Enduring over the time.
• With repeated human behavior as the ultimate explanation. Behavioral finance helps explain why and how markets can be inefficient. We are based on the theory that all agents involved in financial markets can be non-rational at certain times.

Quantitative approach: R+D

• Own quantitative techniques developed entirely by GVC Gaesco Gestión (internal team).
• R&D team (external) of the Faculty of Physics at the University of Barcelona.
• Contrast inefficiencies for a less period of 25 years, validating them in very different market environments.
• Optimization and implementation of inefficiencies. 

Main objective

Attractive returns (in terms of revenue and investment growth) throughout the business cycle. Investment in CIIs is subject to market fluctuations and other risks inherent in investment in financial instruments, so the net asset value and returns obtained may vary both upwards and downwards and an investor may not recover the amount initially invested.

Active Management:

• Exposure to interest and credit rates.
• Search for Value between the different types of Fixed Income assets in terms of credit spread.
• Relative Value Positions (different emitters or different sections of a curve).
• Portfolio:
  • Estructural: it seeks significant returns, which will be modulated according to the evolution of the markets.
  • Tactics in trading positions with dynamic percentages based on structural portfolio investment. 
• Risk management: risk reduction through hedging tools (mostly to hedge interest rate and/or credit risk) and/or through the active use of liquidity levels.

Investment Process

1. Analysis of the Macro Situation and the Economic Cycle
2. Sectoral and Geographical Choice
3. Exposure to interest and credit rates. 
4. Análisis Bottom-up analysis
5. Portfolio construction

• “Bottom Up” management, based on a macroeconomic approach at the Asset Allocation level.
• Seeking bonds that offer value in terms of credit spread.
• More concentrated structural portfolio. As credit risk increases, positions become more diversified.
• Active Management: in terms of management we do not follow the index.
• Relative Value Management: non-directional positions within the same curve and between different curves.
• Ongoing portfolio monitoring.