Investment Partners

5

S.W. Mitchell Capital

F/m Solutions From This Manager

About

Mutual Fund

Separately Managed Account

9

Upon Request

Manager Snapshot

Investment Focus

9

European Equities

Headquarters

9

London, England

Firm Founded

9

2005

Strategy Launch

9

2007

Firm Assets Under Management

9

$1.0 billion as of June 30, 2020

S.W. Mitchell Capital is a specialist European equities investment boutique based in London, England. Founded in 2005, S. W. Mitchell Capital manages approximately $1 billion (as of June 30, 2020) for a global clientele.

Manager Highlights:

9

Fundamental, bottom-up analysis of European equities

9

Concentrated, high-conviction, “best ideas” portfolios

9

Active research program of on-site and in-person meetings with companies and executives across Europe

9

Over 1,000 company meetings in 2019

Strategies Include:

9

Long only and long/short

9

Large/midcap and small cap

9

Pan European and continental Europe

Investment Team

Jamie Carter

Jamie Carter

Partner and Investment Manager

Investment Strategy

Pursuing profits from mispricings of European small cap stocks.

We believe there is unrecognized value in European small cap stocks, due to a structural lack of research, which is only becoming more acute due to increasing regulation.

Unrecognized Value and Potential "Double Alpha"

The unrecognized value may lead to substantial undervaluation or overvaluation. We believe this creates an opportunity for “double alpha,” or potential profits for both long and short positions. We believe we are among the few practitioners dedicated to investing long and short in European small cap stocks.

The Last Equity Frontier?

Average number of analysts covering equities: US vs Europe, Large Cap vs. Small Cap

(source: SWMC, JP Morgan)

The typical small cap stock in Europe may be covered by two analysts, compared to eight for US small caps. Large cap stocks worldwide may be covered by 15 to 20 or so analysts. This lack of research, we believe, creates an opportunity for research-driven portfolio management.

Us Large

VS

Europe Large

VS
VS

Us Small

VS

Europe Small

Investment Process

Management

We meet company managements regularly, and in person, since the team running the company can have a disproportionate effect on a company’s fortunes, better or worse.

Cash Flow

We analyze and assess company cash flows carefully, since companies generally live or die by the cash they do or do not generate. We believe that good companies generate excess cash and reinvest it wisely, and poor companies struggle as cash dissipates.

Catalysts

Among small caps, a catalyst is often necessary for the value of a company to be realized in its market price.

Our process generally leads us to identify
two types of companies:

“Compounders” and “Misunderstood”

Compounders

Compounders are companies that take the cash they generate and reinvest it at high returns into future growth. On the long side, we look for companies that consistently surpass market expectations with their ability to grow. On the short side we look for compounders “gone wrong.”

Misunderstood

Misunderstood companies cover a range of experiences. On the long side, such companies may be difficult to analyze, have made past mistakes, or have been through an industry downturn, all of which may obscure their intrinsic strengths. Misunderstood shorts also cover a range of experiences. Investors may have an overly optimistic view of company fundamentals, a company may be a “value trap,” or management may be undermining company prospects.

Compounders

Misunderstood

Compounders

(declining growth)

Misunderstood

Our process in action

Implementation of the strategy requires a disciplined, three-step process. We dedicate ourselves to this repeatable process over time on behalf of our investors:

w

In-Person Meetings

We meet with companies and management numerous times before initiating positions and while we hold a position.

Financial Analysis

We rigorously assess companies’ financial prospects with a particular focus on cash generation.

Identify Catalysts

Before we initiate a position, we ask what will drive the market to realize a mispricing.

View additional investment partners