Value Investing with Legends

Jan Hummel - Deep Diligence at Paradigm Capital

May 17, 2024

Jan Hummel, CIO of Paradigm Capital, shares insights on risk management and investment strategies in the European asset landscape. Topics include selective investment criteria, geographical focus, portfolio construction, valuation techniques, and macro-economic factors influencing market conditions.

48:46

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Episode guests

Jan Hummel

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Quick takeaways

Paradigm Capital focuses on minimizing risk as a crucial aspect of its investment philosophy, targeting companies with market caps slightly below 10 billion in the small mid-cap space for higher returns over time.

In valuing companies, Paradigm Capital emphasizes normalizing EBIT or EBITDA over cycles to understand sustainable earnings, evaluating gross and EBITDA margins, seeking stability and scale advantages.

Deep dives

Investment Philosophy of Paradigm Capital

Paradigm Capital focuses on minimizing risk as a crucial aspect of its investment philosophy. By targeting companies with market caps slightly below 10 billion in the small mid-cap space, they aim for higher returns over time. The fund specializes in investing in listed companies in Europe, focusing on the three German-speaking countries, the four Nordics, the UK, and Ireland. With a concentrated portfolio typically consisting of 15 to 20 companies, Paradigm also maintains cash for capturing opportunities during market downturns, utilizing a hedging strategy to balance market beta and cash availability.

Importance of Analyzing Margins and Enterprise Value to EBIT-A Multiple

01:14

Barriers to a Unified European Capital Market

01:19

Building a Portfolio through Familiar Companies

03:12

Maximizing Returns Through Strategic Investment Management

02:31

Introduction

4min

Sourcing Investments and Managing Risks in Investment Space

18min

Risk Management and Liquidity Strategies in Long Short Fund

19min

Navigating Growth Opportunities and Value Traps in Investing

2min

Analysis of Geopolitical Challenges and Investment Optimism in Europe

2min

Insights on Inflation and Interest Rates, Book Recommendation on Fiscal Theory

3min

In this episode, Tano Santos sits down with Jan Hummel, CIO of Paradigm Capital, revisiting his investment strategies and exploring the nuanced dimensions of risk management in the evolving European asset landscape. Jan discusses the foundational investment philosophy of Paradigm Capital, emphasizing risk minimization and the strategic deployment of assets across Europe. Key discussions pivot around the firm's selective investment criteria, focusing on companies in the small to mid-cap space and the significance of geographical and cultural nuances in their investment decisions. This conversation offers listeners insights into the subtleties of value investing, portfolio construction, the implications of geopolitical and economic dynamics on market opportunities, and so much more!

Key Topics:

Introduction and background of Jan Hummel (0:37)
Fundamental tenets of investment philosophy at Paradigm Capital (1:25)
The impact of European market dynamics on investment strategies (7:25)
Sourcing and valuing investment opportunities (9:47)
Specific approaches to risk management and hedging strategies (22:23)
Portfolio sizing and the decision-making process behind exiting investments (26:00)
The role of geographical focus in Paradigm's investment strategy (29:12)
Valuation techniques and practical applications in portfolio management (32:03)
Trends and challenges in the European asset management industry (36:48)
Macro-economic factors influencing market conditions and investment decisions (40:30)
Prospects for growth and opportunities in the European financial landscape (45:17)
Jan’s book recommendations (46:06)
And much more!

Mentioned in this Episode:

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Value Investing with Legends

Jan Hummel - Deep Diligence at Paradigm Capital

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Investment Philosophy of Paradigm Capital

Sourcing and Portfolio Building at Paradigm Capital

Valuation Methodology at Paradigm Capital

Risk Management and Hedging Strategies at Paradigm Capital

Importance of Analyzing Margins and Enterprise Value to EBIT-A Multiple

Barriers to a Unified European Capital Market

Building a Portfolio through Familiar Companies

Maximizing Returns Through Strategic Investment Management

Get the Snipd
podcast app

AI-powered
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Discover
highlights

Save any
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highlights

Value Investing with Legends

Jan Hummel - Deep Diligence at Paradigm Capital

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Investment Philosophy of Paradigm Capital

Sourcing and Portfolio Building at Paradigm Capital

Valuation Methodology at Paradigm Capital

Risk Management and Hedging Strategies at Paradigm Capital

Importance of Analyzing Margins and Enterprise Value to EBIT-A Multiple

Barriers to a Unified European Capital Market

Building a Portfolio through Familiar Companies

Maximizing Returns Through Strategic Investment Management

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