Never take your eyes off the cash flow because it's the lifeblood of businessRichard Branson
Patience. As former private equity (“PE”) executives, we naturally have a long-term investment horizon. Patient capital is required to allow the quality companies and competent managers in our portfolio sufficient time for the equity thesis to unfold and create significant shareholder value. In a market environment where many participants are forced to trade on short term developments, we believe that our patience confers a decisive behavioral edge.
Value. In our experience investing in the public markets, we have consistently profited from the over- and under-shooting of the market. To do so, we compare the long-term underlying value of a business to its current market price. These two values can decouple in the short term but tend to converge in the long term. When we identify such decoupling, we analyze how the perceived mispricing resulted and what catalysts could potentially resolve it.
Volatility. We welcome market volatility as a creator of opportunity. Volatility allows us to build positions in quality businesses at discounted entry prices. The greatest risk we face is not volatility but rather incurring a permanent loss of capital.
Original insight. As passive and automated strategies progressively dominate trading flows in the broader markets, original insights and new perspectives will become increasingly valuable as a source of alpha in our clients’ investment portfolios. Our unique PE-oriented selection approach confers upon CCA a systematic edge. We have sequenced a broad range of PE success factors to create a proprietary quantitative and qualitative framework for investing. We apply this framework in a consistent and disciplined fashion.
Put your money where your mouth is. We invest a significant share of our private assets into the funds we advise. This way we make sure that the interests of investors are perfectly aligned with ours. We are in the same boat.
Our private equity inspired investment approach
CCA employs the same rigorous due diligence approach that a top tier private equity firm would prior to purchasing an entire company. When valuing a business, we ask ourselves how much a buyer should be willing to pay to own the entire company given the existing management team, strategy, and prospects.
We continuously monitor a set of approximately 50 companies that we regard as particularly interesting. This set only includes business models and industries that we can fundamentally understand. We focus on European companies with a market cap under EUR 8 billion, as we know this market well. Our typical investment horizon is between two and four years but could be shorter or longer depending on the opportunity.
Decades of successful private market investing give CCA an edge in evaluating market attractiveness, corporate strategy, and management quality. We execute bottom-up analysis with a special focus on understanding the industry. We go beyond desktop analysis and like to meet managers, competitors, suppliers and customers. To do this, we capitalize on a network which we developed over the course of our careers as private equity managers. This primary research leads to an uncharacteristically high level of conviction for each of our very limited number of positions.