Markets are noisy. Value is often quiet.
Nick Sleep
Nomad Letter - 2005
Uncovering Hidden Gems Off The Beaten Path
Scuttlebutting for Value in Global Small-Caps
ABOUT
Just Two Siblings Compounding
Capital & Knowledge
Value Siblings Capital is an opportunistic, value-oriented, and fundamentals-driven private investment partnership committed to compounding its capital at an attractive rate of return with sensible risk by focusing on the margin of safety principle.
We actively target concentrated investments in global equities and select debt securities that can be purchased at steep discounts to their intrinsic or recovery value. We focus on small- and mid-caps, thinly traded issues, and special situations, seeking to identify value that the market has yet to recognize.
SETUP
One Platform
Value Siblings builds a joint platform for two separate long-term investment holdings. This setup allows each sibling to manage their capital independently while remaining aligned under a shared philosophy and long-term vision.
Philosophy
0
Investment Holdings
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STYLE
Investment Philosophy
Our investment approach is rooted in an intrinsic value investing framework, with a strong emphasis on deep, proprietary fundamental research, thoughtful security selection, and a bias toward portfolio concentration.
For us, capital preservation is as important as return potential. This is why we strictly adhere to the margin of safety concept and maintain valuation discipline by purchasing securities only at substantial discounts to carefully assessed fundamental value across a spectrum of plausible outcomes.
Consistent with this philosophy and a long-term business-owner perspective, we follow a systematic, research-driven investment process focused on what matters most to us: business quality, balance sheet strength, management, and the price we pay.
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Patient Investing
Long-only, fundamental stock picking.
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Simply Value
Price is what you pay. Value is what you get.
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Disciplined Rock Flipping
We turn over as many rocks as possible.
APPROACH
Core Strategy Pillars
Our aim is to generate long-term alpha
Prive vs. Value
We target businesses trading at steep discounts to a conservative estimate of the underlying intrinsic values. We stick to a simple principle: seize opportunities with asymmetric payoffs, where we get disproportionately compensated for the level of risk we assume.
Concentration
We believe excessive diversification doesn’t add value and leads to mediocre results – we act boldly and only invest when we spot deep undervaluations. We hold our highest conviction ideas in a “concentrated” portfolio of 10-25 stocks.
Downside Protection
We balance opportunistic investing with capital preservation and strong downside protection, insisting on a sufficient margin of safety to protect against unpredictable economic events, “unknown unknowns” and errors in our analysis.
Hurdle Rate
We have high return expectations and target situations that can deliver an IRR of over 20% p.a. over the medium term. By applying a higher discount rate, we deliberately narrow our focus on the best investment candidates.
ALLOCATION
Portfolio Construction
As a cornerstone of our portfolio, we make “fairly” concentrated investments in high-quality, reasonably valued businesses capable of compounding underlying fundamental value over time. Special Situations and “Deep Value” stocks – that are experiencing a temporary dislocation or undergoing an element of change that will cause investors to revalue an investment in the near term – will complement the portfolio to varying degrees.
PORTFOLIO HOLDINGS
10-25
HURDLE
RATE
20% IRR
TIME
HORIZON
5-10Y
MAXIMUM
POSISTION SIZE
15%
at cost
CASH
MANAGEMENT
Residual of Opportunity Set
EXIT
TRIGGERS
Fair Value, Thesis Broke, Better Idea
FRAMEWORK
How We Approach Investing
1
Conviction Investing
We focus on developing high-conviction views through deep fundamental research, believing that research fosters conviction, conviction nurtures patience, and patience ultimately builds wealth.
2
Patient Capital
We do not speculate on short-term market swings but take a long-term co-ownership approach, emphasizing factors that increase or impair a company’s future economic value. Markets may react like ‘voting machines’ in the short term, yet weigh true value over time.
3
Thoughtful Contrarianism
We are convinced that long-term alpha is rooted in intellectual independence and thoughtful contrarianism when the odds are stacked favorably. This is why we thrive on sifting through underresearched market segments to uncover hidden gems off the beaten path.
4
Small-Cap Focus
As a small, focused partnership, we capitalize on structural inefficiencies and unique market opportunities that large funds often overlook due to liquidity constraints and strict mandates, thereby enhancing our return potential in a less competitive investable universe. Our edge is based on time, information, and liquidity arbitrage.
TEAM
The Siblings
Managing Director at Blackpine Capital GmbH
Junior Portfolio Manager at Lacuna Family Office
Managing Director at Arvora Capital GmbH
Value Investing Analyst at FORUM Family Office
CONTACT