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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Evermore Global Value Fund focuses on catalyst-driven value investing in family-controlled companies and special situations globally. Despite Q2 underperformance due to Viaplay streaming disappointment, the fund benefits from strong shipping exposure and offshore wind positioning through the Eneti-Cadeler merger."
The Evermore Global Value Fund employs a catalyst-driven value investing approach, seeking companies globally with compelling valuations undergoing strategic changes to unlock value. The fund returned -0.56% in Q2 2023 versus the MSCI All-Country World Index ex USA which gained 2.44%, bringing year-to-date performance to 7.67%. Family-controlled companies represent 74.5% of the portfolio, an area the managers expect to grow as more such businesses undergo value-creating changes. Key contributors included offshore wind installation companies Eneti and Cadeler, which announced a transformative merger, and BW LPG which the fund exited profitably. The largest detractor was Viaplay Group, a Nordic streaming company that missed numbers and experienced higher churn after price increases. The fund maintains a concentrated approach with 23 issuer positions and significant exposure to shipping, energy transition, and special situations. The managers leverage their operating experience and global relationships to identify undervalued opportunities with specific catalysts for value creation.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The fund demonstrates high conviction through its concentrated portfolio of 23 issuer positions with detailed analysis of individual holdings. The managers provide specific position sizing language, name individual companies with substantial commentary, and express strong views on value creation catalysts. The approach of collaborative engagement and willingness to hold through volatility indicates strong conviction in their investment process.
Growth Outlook
The managers acknowledge negative headlines at the start of Q2 2023 but note that forecasts have proven way off the mark with markets grinding higher. They describe incredible market resiliency but warn that when the AI-driven music stops, carnage could be material. This reflects cautious optimism tempered by awareness of potential risks.
Risk Appetite
The fund maintains a concentrated approach with 23 issuer positions and 74.5% in family-controlled companies. They are selectively adding new positions like Genco Shipping while exiting profitable positions like BW LPG. The positioning suggests moderate risk appetite with selective deployment rather than aggressive risk-taking.
Capital Deployment
The fund shows modest net deployment activity with one new position (Genco Shipping) added and one position (BW LPG) fully exited during the quarter. The managers describe being selective in opportunities and taking profits when targets are reached, suggesting measured deployment rather than aggressive capital allocation.
Forward Guidance
The managers expect family-controlled companies to continue growing within the portfolio and believe current holdings like Exor remain undervalued. However, they are selective in deployment and willing to exit positions when targets are reached, suggesting measured optimism about future opportunities.
Language Signal
Language includes positive terms like compelling valuations, attractive opportunities, and strong fundamentals, but is balanced with risk awareness including disappointing developments, unexpected turns, and potential carnage. The tone is more cautious than bullish overall.
Perceived Risk
The managers acknowledge multiple risk factors including banking sector stress, geopolitical tensions, potential recession, and warn that AI-driven market gains could lead to material carnage when momentum slows. They express disappointment with unexpected developments like Viaplay's deterioration, indicating meaningful awareness of downside risks.
Opportunity Density
The managers see growing opportunities in family-controlled companies undergoing value-creating changes and identify compelling valuations in specific sectors like shipping. However, they emphasize selectivity and patience, suggesting opportunities exist but require careful evaluation rather than abundant choices.
Time Horizon
The fund emphasizes staying patient as value creation unfolds and describes collaborative engagement with management rather than aggressive activism. The focus on catalyst-driven investing with multi-year value creation themes and willingness to hold through volatility suggests a medium to long-term investment horizon of 2-5 years.
