Petrus Advisers Special Situations

Investment Objective

The objective of the Fund is to generate high absolute returns from long/short investing in Core Europe applying an active / entrepreneurial approach. Focus is on undervalued equities with low correlation to overall market, mainly in the mid-cap segment. We prefer companies with stable cash flow and/or restructuring potential. The Fund pursues active engagement with management teams and boards and benefits from strong focus on liquidity, risk and exposure management.

Latest Meeting Note

Meeting 08 Feb 2024

Petrus Advisors was founded in 2009 and has become a leading mid-cap activist in Europe, centred on a concentrated strategy that adopts a constructive activist approach with a focus on fundamentals and value. The portfolio is concentrate...

Petrus Advisors was founded in 2009 and has become a leading mid-cap activist in Europe, centred on a concentrated strategy that adopts a constructive activist approach with a focus on fundamentals and value. The portfolio is concentrated in nature, consisting of typically no more than 30 core long/short positions, with a particular emphasis on 8-12 top activist long positions. The strategy employs a private equity style for deal sourcing and due diligence on markets and companies, ensuring thorough examination and selection of investment opportunities. The team's typical approach to value creation includes operating improvements and engaging in special situations with a focus on domination agreements, squeeze-outs, and other legal strategies. The process starts with over 1000 companies and narrows this down to 250 to 300 companies which are identified through a combination of proprietary networks, value screenings, and expert insights. The process then moves to an initial IC discussion, focusing on 100 to 150 companies each year, examining business models, financials, and ESG factors while looking for catalysts that signal potential growth. From here, an in-depth deep dive narrows this down to 50-70 companies, culminating in active engagement with 2-5companies annually. Core position types are bifurcated into Conviction – Active Involvement, where 7-12 companies are chosen for active engagement with management and shareholders, and Conviction – No Active Involvement (derived from the deep-dive research phase), targeting misvalued stocks for potential growth. The former involves up to 10% portfolio allocation per position with a 3.5-year average investment period, while the latter involves a more diverse range of 5-20 positions, split on both sides of the book, with shorter investment periods. Active positions may employ public engagement and hedging strategies to mitigate risks, whereas non-active positions rely on thorough due diligence without the need for management or governance intervention.

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2023 0.5 0.9 0.5 1.0 0.0 0.7 0.5 0.5 0.6 0.8 0.2 0.1 0.8
2022 0.1 0.3 0.2 0.1 0.4 0.2 0.6 0.8 0.4 0.6 0.8 1.0 0.9

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