Investment Philosophy
The investment objective of the Fund is to achieve capital growth by investing primarily in European listed companies that are fundamentally sound but whose shares trade at a discount towards peers or estimated intrinsic values and where shareholder engagement or other external factors can lead to improved performance and creation of shareholder value.
Deminor Investment Management has set up a unique stock selection process comprising both a traditional value analysis and a corporate governance assessment of target companies. The Fund's holdings shall be selected among undervalued companies with sound fundamentals and whose undervaluation can be explained by governance weaknesses.
The Fund may protect itself against certain risks by using straightforward hedging techniques.
The Fund will initially focus on mid-cap listed companies in the Benelux, France, Germany, Italy, Spain, Austria and Switzerland.
Once invested, DAGF aims to interact with target companies and put its long time experience as corporate governance expert to the benefit of the company, its board of directors, management and other shareholders. In such a way the Fund hopes to achieve durable governance improvements and long term sustainable value creation for the company and its shareholders.
The Fund has a long term focus. Deminor believes that active engagements of target companies cannot be carried out on the short term. Such engagements require time for discussion and for building a relationship based on mutual trust. Changes that can be introduced with the support of all constituencies will be more durable and are likely to create more long term value for the company. Deminor however will be determined in achieving the changes that it believes are in the interest of the company and, when necessary, may have recourse to stronger means of persuasion to have the required changes implemented.
DAGF hopes to be a catalyst for governance improvement, in the interest of its portfolio companies and their shareholders, and to reap the benefits of such improvement through the resulting increase of these companies' value.