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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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.
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