Carlos Val-Carreres, the star manager who has signed up MyInvestor for the launch of his background valuehas an important challenge ahead: reviving the style of investment in value in “an economy that today is already more global, intangible (digital) and, fortunately, it will be increasingly sustainable“.
Your new background, MyInvestorValue, has already begun to be marketed in the investment neobank owned by Andbank, AXA, El Corte Inglés Insurance and other institutional. As published by EL ESPAÑOL-Invertia, it starts without a management fee until it reaches 20 million euros, although it does have a 9% success fee on results.
In his letter of introduction to investors, who have already received the first clients of the entity to be interested in the fund and who have been able to consult this newspaper, the renowned manager does not spell out what his initial portfolio of shares will be like or potential profitability adventures such as other funds in this sector usually do. However, he gives some insights into what investors who entrust their savings to him may find.
“We build prudently diversified portfolios so that the method always prevails over individual ideas”, emphasizes Val-Carreres. The fund invests looking for “the best companies, at a global level, to have exposure to the most relevant structural trends of each moment”, such as the digitization or electrification.
All this, under a value investment philosophy, focused on what Val-Carreres defines as “new paradigm value: value creation”. That is, “in the long term there is no better safety margin than the recurring generation of returns that increase the value of our investment,” he writes in the letter, thus counterbalancing the historical desire of managers value Spaniards for the variable price as the main engine of an investment.
As a result of the pandemic, his team identified two major structural trends: “A more basic and closer economy, as well as a more digital one, and that companies with a solid balance sheet and net cash will not only better preserve capital, but also understand the crisis as an opportunity. What does this mean? What more than investing in companies traditionally value it was necessary to do so in those that were well positioned to generate value in this new economic scenario.
And it is that the value in its most classical conception “perhaps dead forever”. Normally, after big crises and corrections, where the style growth or growth has worked better, the value has prevailed in recoveries. But this time it has not been like that. For sample, a button. From April 2020 to October 2021, the American index Russell 3000 Value has appreciated by 83.11% compared to 105.94% for the Russell 3000 Growth. As the saying goes, it is renew or die.
The manager, known for his time at the head of the César Alierta sicav (Lierde), advocates adapting the investment method to the new economic reality “so as not to remain anchored in the past”. “Probably the best value investor in history, Warren Buffetis the best example of evolution from the beginnings of his teacher and the second best value investor in history, Benjamin Graham”, recalls Val-Carreres.
As a claim, it argues that “investing in value is still as valid today as it was originally, as long as it is in companies with a high and sustainable value creation”, while “it continues to be the best option for the long-term investor ”. And to corroborate this, a historical fact provided by researchers Eugene Fama (Nobel Prize in Economics 2013) and Kenneth French.
An investor who would have invested a dollar with a style value from 1927 to 2020 your investment would have increased to $51,514. On the contrary, if he had done it in a style growth, your net worth would be $2,922. That is, the total return with a value investing style is nearly 18 times higher. But it has a drawback: this better relative performance of value management has not been linear, with long periods in favor of the growth style.
Given this scenario, “by being selective, we have been able to build a very interesting first portfolio, both for its potential and for its low level of risk.” We will have to be aware in the coming weeks of its development and first positions.