RBR Capital Advisors AG - Best Long Bias Fund
At the heart of Swiss-based RBR Capital Advisors AG's investment philosophy is the strong belief that rigorous bottom up research has the potential to allow it to outperform the markets on a consistent basis. RBR Capital invests in companies by building a strong fundamental investment case allowing it to take meaningful position sizes in those companies in which it has the most conviction.
Rudolf Bohli (pictured), Founder and CEO of RBR Capital Advisors, and his investment team invests only in Continental European equities where, as Bohli explains: "we have strong local alpha with Swiss and German companies due to the geographical proximity and the fact there are no language barriers."
The firm wins this year's global award for best long-bias fund for the RBR Strategic Value Fund, a single stock co-investment fund, which in effect operates in a similar fashion to an activist fund. "RBR Strategic Value Fund was created specifically for the opportunity to allow our investors to participate in a unique opportunity to invest into gategroup, a Swiss-listed leading independent airplane catering company, where we have engaged in an activist manner," says Bohli.
The fund, which has USD45 million in AUM, currently uses moderate leverage (130 per cent) and the volatility is largely dependent on the performance of the gategroup stock, which has returned 33 per cent over the last 12 months and is fractionally down on a year-to-date basis.
Bohli explains that RBR Capital's position in gategroup is not mainly based on a general bullishness on the aviation sector, "but rather on the enormous cost saving potential within the company. We have been pushing actively for this and we have been engaging with the board and the management of the company for more than 18 months. Our efforts have produced initial results but we believe there is still massive upside to be realised via further cost savings."
Indeed, RBR Capital helped to replace four out of seven people on gategroup's board of directors last year, which included Gerard van Kesteren, former CEO of Kuhne & Nagel, and Fred Reid, former CEO of Virgin America.
"We are not a general activist manager. Most of our positions in our diversified funds are not activist positions. We just found the upside potential in gategroup so compelling that we started to become activist with this position and due to the huge upside potential we have created a dedicated fund," continues Bohli.
RBR's objectives within the RBR Strategic Fund are threefold:
• For the BoD to implement a significant restructuring programme to strengthen internal controls, optimise financial structure and cut costs;
• Return to best-in-class margins and returns;
• Restore investor sentiment to GATE which is operating in a strong and growing industry.
In Bohli's view, frequent exchange with management is an effective way to seek out alpha. "Continental Europe has fewer hedge funds covering companies. Therefore we believe we have a specific edge in Switzerland and Germany, where we are even closer culturally. With respect to other opportunities, we are excited at the low valuations of the Greek banking sector and we are currently considering launching yet another dedicated special fund to profit from this opportunity."
On winning this year's award, Bohli comments: "We are very pleased to see that our approach of creating special opportunity funds has been proven to produce the results that we set out to achieve.