Investment strategies

At QUAERO CAPITAL, we believe that value stems from independent thinking, an original  approach and strong convictions.

Whenever you find yourself on the side of the majority, it is time to reform or pause and reflect
Mark Twain

These principles underline our investment strategies.

European small capitalization stocks

Using a very focused and disciplined Value Investment philosophy, the QUAERO CAPITAL Smaller Companies Team aims to invest in smaller European companies that trade at a substantial discount to both their intrinsic value or to their long-term profit potential. The small cap team is one of the most experienced in its field and operates in one of the least researched part of the European markets. This dedication to investing “under the radar screens” and to a very research-intensive process has produced very credible results over the past 15 years.

The Argonaut strategy is one of the few investing exclusively in micro capitalisation stocks and concentrating on the lowest tiers of European stocks.

The Smaller European Companies uses the same investment philosophy and process but with a bias towards companies that have a substantial shareholder that is a family. This additional filter has shown to produce strong results over the long term but is yet widely ignored by most investors.

The New Europe strategy invests in small and medium sized companies across Eastern European according to a broader definition of the region, including countries such as Greece, Turkey and Russia. The strategy focuses particularly on little-known or poorly followed smaller and medium sizes stocks that have been ignored by mainstream investors, sometimes due to their location or their size.

The Swiss Small&Mid Cap strategy aims to achieve capital growth by investing in a diversified portfolio of Swiss-based companies, applying a strictly “Value” bias. The strategy focuses on companies that are undervalued or neglected by investors and analysts because they are less liquid that blue chips. The « Value » philosophy aims to limit the downside risk of selected securities, through a so-called « margin of safety » approach.

High Conviction Equities

The Accessible Clean Energy strategy aims at maximising total return by responsible investments globally along the clean energy value chain. The strategy provides access to a large and diverse set of industries via an active, long only listed equities strategy offering daily liquidity. The strategy invests in a concentrated portfolio of best in class clean energy generation, technology, transmission and efficiency companies while incorporating environmental, social and governance (ESG) criteria as part of the investment process.

On 1st December 2016, Berger van Berchem & Cie SA has been appointed as the new manager of the World Opportunities strategy, which offers a diversified exposure of world equity markets. The investment objective is to achieve superior risk adjusted returns relative to world equities over a 3 year rolling period, using both a price trend and a fundamental approach to select and evaluate companies in absolute and relative terms. The strategy is managed with both value and growth principles from a global investment universe of more than 5’000, with a clear bias towards reasonably valued stocks.

For the Bamboo strategy, invested in Asian equities, QUAERO CAPITAL has partnered with emerging markets veteran Robert Lloyd George. Actively managed, the strategy aims to generate consistent returns by investing in a portfolio of 30 to 50 stocks of Asian and emerging market companies that will benefit from the emergence and growth of domestic consumption in what the manager believes will be the fastest growing regions of the world. Stock selection will focus on strong cash flow generation and sustainable dividend yield. The strategy will at all times be invested at least 67% in Asia, with the MSCI Asia Pacific Index* as Benchmark. The investment strategy will use both top down asset allocation and bottom up analysis to build a concentrated portfolio. The investment team identifies growth themes across the investment universe and will research and invest in companies in specific sectors which will benefit from these growth themes. The portfolio management team will focus on original research and maintain a disciplined investment process, paying particular attention to corporate governance and ESG principles. The strategy aims to have low turnover and a strong risk management framework in order to deliver consistent and repeatable returns for investors.

* The benchmark is not in the investment policy.

Japanese Equities

The objective of the Taiko Japanese equities strategy is to achieve long-term capital growth by investing in listed Japanese companies. The strategy seeks to profit from investment opportunities by identifying under-valued securities using a variety of fundamental analytical tools focusing upon growing cashflows and then employing qualitative screens to implement positions. The strategy has a concentrated portfolio, typically holding between 20 and 30 different positions at any given time but with diversification across multiple sectors. The strategy invests in companies throughout the capitalisation range but not below JPY 20bn.

Equities Long / Short

The objective of the European Equities Long / Short strategy is to generate equity-like returns over the long term whilst limiting losses over the medium term. To reach this objective, we aim to profit from pockets of market inefficiencies in European equity markets through the application of a systematic investment process. More specifically, we carry out a European, all-cap, value-driven, “quantamental”, equity strategy, which follows a transparent and disciplined investment process, subdivided into three main elements: a pure bottom-up stock picking procedure, a robust concentrated portfolio construction procedure and a dynamic market risk mitigation procedure. The core idea of the approach is to combine valuation indicators with price and outlook momentum indicators.

Infrastructure

QUAERO CAPITAL has developed a strong expertise in real assets.

Specialising more specifically in infrastructure investment in Europe, the Infrastructure (Not Listed) investment team focuses on the PPP / PFI sector and private project financing by targeting small to mid-size infrastructure projects. We believe that this strategy offers an attractive risk / return framework and direct access to recurrent cash flows over the long term. The investment team has in-depth knowledge of the infrastructure market and its players in Europe. It has strong expertise in financial engineering enabling to invest with protective features for its investors, following a thorough investment process. QUAERO Infrastructure implements a generalist approach: telecom, transport, social infrastructures, utilities, water and energy. The QUAERO Infrastructure team is also committed to responsible investing and has established a charter of principles to integrate responsible governance, social and environmental criteria in its investment process.

Using research gathered over several years, QUAERO CAPITAL has also built an expertise in listed infrastructure investing by focusing on a liquid solution for a very defensive asset class. The objective of the Infrastructure (Listed) strategy is to create a long-term thematic vehicle with weekly liquidity for investors wanting to take advantage of the sector’s unique characteristics: low correlation to markets and the business cycle, high correlation to price indexes, diversification benefits for an equities portfolio and protection in difficult markets.

Absolute Return

The Yield Opportunities strategy invests in assets with attractive risk-adjusted yields across Bonds and Equity asset classes on a worldwide basis and aims to achieve consistent risk-adjusted returns with low volatility over the long term. Using a macro overlay, the manager invests in undervalued yield opportunities currently subject to concurring positive macroeconomic changes. The portfolio construction is the result of individual securities selections and is not managed by reference to any benchmark. The manager applies a rigorous capital allocation and risk control by monitoring overall exposure to FX, rate and credit spread.

Mixed assets

QUAERO CAPITAL offers three mixed asset strategies and one international equities strategy. The mixed asset strategies each offer a specific risk return profile – conservative, balanced and dynamic – to cater for investors’ specific investment profile. The international equities strategy aims at providing exposure to global equity markets. The asset allocation is the result of QUAERO CAPITAL’s global economic forecasts and funds are selected using both quantitative filters and a qualitative research process. Each of these strategies are available in several currencies.