With all that is happening in Europe and globally, it can be very helpful to get an outlook from an investor who thinks not only about the macro picture, but also focuses intensely on the micro picture, seeking to uncover opportunities to invest when others want—or need—to get out of a sector, region or company.
Such is the case with a disciple of the legendary value investor Michael Price and the late Swedish billionaire Jan Stenbeck, David Marcus (left) co-founder, CEO and CIO of Evermore Global Advisors.
Stenbeck, who mounted an America’s Cup challenge, according to The New York Times, “seeded” Marcus' hedge fund, Marcstone Capital Management, LP, (no relation to Markstone Capital Group) with “$100 million,” Marcus told AdvisorOne. (Stenbeck's "Victory Challenge" America's Cup racers are below.)
Marcus closed Marcstone after Stenbeck passed away in 2002. After co-founding Stenbeck’s family office, Marcus founded and was managing partner of MarCap Investors LP, managing a European “small-cap special situations fund,” from 2004 to 2009.
Marcus is now head portfolio manager of two mutual funds he started on Dec. 31, 2009, the "go anywhere" Evermore Global Value Fund (EVGBX) and Evermore European Value Fund (EVEAX). Jae Chung is co-portfolio manager of those funds.
Class A shares of Global Value (without sales charge) returned 17.59% for the one-year period ended Feb. 28; with the maximum sales charge, they returned 11.73%, versus the benchmark MSCI All Country World Index, which was up 21.54%
Class A shares of the European Fund (without sales charge) returned 9.00% for the one-year period ended Feb. 28; with the maximum sales charge, they returned 3.60%, versus the benchmark MSCI Daily Return Net Europe Index, which was up 14.83%
Both funds search for equities that are “undervalued and that have catalysts for significant positive change,” including changes in management or “restructurings, spin-offs, downsizing, recapitalizations, mergers, acquisitions, industry consolidation.”
Taking an “opportunistic” approach to value investing, and always looking for a “catalyst,” Marcus keeps some cash on hand for times when everyone else is under pressure to sell, and then will selectively pounce. He spoke by telephone with Kate McBride on Wednesday.
Q: Why don't we start with an overview of the lively situation in Europe?
A: Yes, I’ve been investing in Europe for almost 20 years—there’s always something going on somewhere in Europe. In the midst of crises we often get our best opportunities. It doesn’t mean buying those stocks that day, [but when] people are selling [because they have to.]
Q: Not to catch a falling knife but find good opportunity?
A: When the vortex started pulling the markets down people started dumping European stocks—in a panic people retreat home to America. But we’re the opposite—we buy when people panic.
Q: You need the stomach to sit it out?