The Fund is the one of the few global funds which is not restricted to any style box, and can invest across any industry, country or company size. The Fund adheres to a disciplined, value investing strategy that combines rigorous due diligence with deep insight developed over a decade to produce superior risk-adjusted absolute returns. The Fund targets an annual return of 15% (net of all fees), and expects to beat the benchmark MSCI All Country + Frontier Market index by 700bps on an annualized basis. Our preference is to own a semi-concentrated portfolio with our highest conviction ideas being complemented by a range of opportunities with huge upside potential. The Fund’s ideal holding period per position is 3-5 years, however, positions are promptly sold if they; exceed our fair value targets; or evolve counter to the original investment thesis. Market timing does not factor into the Fund’s strategy.
Ideally the Fund seeks to invest in quality businesses carrying low debt on balance sheets, with good managements that treat shareholders fairly, selling at reasonable to low valuation multiples. Some of the factors the Investment Manager will look at include cash allocation decisions of management, financial track record of the company, returns on capital and absolute valuation levels. The Investment Manager will also look to visit and/or communicate with the companies in the Fund’s portfolio. Once securities are purchased, the Fund is willing to hold it positions as long our the Investment Manager’s underlying investment thesis remains intact. During times of elevated market levels or when we find we are unable to find bargains, the Fund may hold a substantial portion of its portfolio in cash, which allows for valuable dry powder to deploy when opportunities arise (particularly during market panics).
The Intrepid Capital team has built a strong 9-year legacy, and has advised some of the Middle East’s largest family office on investment opportunities. Intrepid Capital’s professionals have extensive experience with investing across developed, emerging and frontier markets, and this flexibility increases the Fund’s potential for generating superior returns for investors, as evidenced by the firm’s audited track record. The team has robust idea sourcing capabilities through an exhaustive internal “shopping list” of pre-screened ideas built over 10 years plus proprietary screens and investor networks which help identify the best ideas globally. The investment team builds massive margins of safety into financial projections and entry valuations, while targeting a minimum of 15%+ IRRs over a 3 year period. The team has the ability to breakdown and invest in stocks and listed debt securities that are generally misunderstood or neglected by the larger investment community due to their relative illiquidity or small size.
The Fund has the ability to take short positions or utilize portfolio insurance to hedge some of its risk from its existing long positions or to make outright short investments. Call and Put options can also be utilized for hedging or outright long/short positions.