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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Van Der Mandele Arar Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"Deep value fund underperformed in 2024 as expensive US large caps dominated returns. Manager holds concentrated portfolio of small caps trading at 2-5x earnings while avoiding Mag-7 stocks now at unsustainable valuations."
Van der Mandele's fund delivered a narrowly positive return in 2024 but significantly underperformed benchmarks driven by expensive US large caps. The manager maintains conviction in his deep value approach, holding a concentrated portfolio of approximately 20 small-cap stocks trading at extreme discounts, including shipping companies at 2-3x earnings and Asian net-net stocks with more cash than market cap. While the fund missed the Mag-7 rally that drove benchmark performance, the manager argues these stocks now trade at unsustainable valuations requiring unrealistic growth assumptions. The portfolio includes positions in Alphabet, Jackson Financial, multiple shipping companies, and Asian value plays. Key risks include continued multiple expansion in expensive markets and potential for value traps in cheap stocks. The manager expects 2025 to favor value investing as expensive markets become increasingly risky, positioning the fund as a diversifying alternative to passive index investing concentrated in overvalued large caps.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evident through concentrated 20-stock portfolio with named positions and specific valuations. Manager provides detailed analysis of individual holdings, sizes positions explicitly (shipping at 15%, energy companies named), and states he holds over 80% of liquid assets in the fund. Clear thesis per holding with specific P/E ratios and catalysts discussed.
Growth Outlook
Manager is explicitly bearish on US large caps and Mag-7 stocks, calling current valuations 'uncomfortable' and 'scary' with P/E ratios only seen before major bear markets. Compares current setup to 1999 and 2021 bubbles, expressing clear pessimism about expensive market segments.
Risk Appetite
Fund maintains concentrated positions in value stocks but is defensively positioned against expensive markets. Manager is selectively adding to cheap positions while avoiding expensive growth stocks, showing moderate risk appetite in specific value opportunities.
Capital Deployment
No specific cash level changes mentioned. Manager describes maintaining current positions and continuing to look for value opportunities, but no evidence of significant new deployment or de-risking. Appears to be in monitoring mode with selective activity.
Forward Guidance
Manager plans to continue current strategy of holding cheap stocks while avoiding expensive markets. No indication of major deployment or de-risking, but rather maintaining current positioning with selective opportunities in value segments.
Language Signal
Language is dominated by risk warnings about expensive valuations, 'scary numbers,' 'frightening' levels, and comparisons to bubble periods. While optimistic about own holdings, overall tone emphasizes market risks and overvaluation concerns.
Perceived Risk
Manager extensively discusses systemic risks including US market valuations at levels only seen before major bear markets, AI CAPEX boom sustainability concerns, and broad market overvaluation. Detailed analysis of specific threats to Mag-7 companies and comparison to previous bubble periods shows high perceived risk.
Opportunity Density
Manager sees abundant opportunities in value segments, stating 'stocks with a P/E under five seem to be everywhere' and claiming over 300% upside in current holdings. While opportunities are concentrated in specific value corners rather than broad market, the manager clearly sees rich opportunity set in his focus areas.
Time Horizon
Multi-year investment horizon evident through discussion of 3-year shipping contracts, expectation that companies will 'earn market cap within three years,' and references to historical value investing cycles. Manager expects convergence between cheap and expensive stocks over time rather than immediate catalysts.
