Aventine Asset Management Inc.

Strategy Overview

The Aventine US Equity Strategy seeks long term capital growth through an active, value plus catalyst investment strategy, whereby the Strategy’s managers are seeking to identify undervalued companies that are undergoing positive fundamental change.  The Strategy’s long investments are concentrated in a high conviction portfolio of 20 US-listed companies whose average market capitalization will typically fall between $10 billion and $20 billion. The Strategy, in pursuit of its objectives, may also short securities, use moderate leverage and employ derivative securities.

Investment Objectives

  • Attractive returns on both an absolute and relative basis.
  • Reasonable volatility.

Investor Suitability

This strategy is ideally suited for investors seeking US equity exposure that is unconstrained by the sector weights of broader indexes like the S&P 500, and who are willing to accept moderate volatility.  The Strategy is focused on absolute returns and utilizes various techniques such as short selling and options to limit downside exposure to declining markets.  This strategy is an excellent complement for investors who hold substantial exposure to large cap stocks or broad market index ETFs.

Investment Process

Portfolio Design

The Strategy follows a multidisciplinary “Active Value” investment approach which seeks to invest in undervalued, catalyst-rich companies that are in the midst of positive fundamental change and experiencing an increase in market support.  The Strategy will primarily own long positions in US companies but it may also invest up to 10% of its capital in the shares of foreign issuers and hold short positions up to 20% of the Strategy’s capital.  We also use options and cash management to reduce volatility and manage downside risk.

Capital Allocation and Security Selection

under construction

Risk Management

under construction

Strategy Performance

Launched on January 1, 2017, the Aventine US Equity Strategy is co-managed by Jim Pottow and James Telfser.  Since inception the Strategy has generated exceptionally strong performance and risk control.

The below information is current as of October 31, 2017.

Growth of $1,000,000

Graph showing monetary figures

Performance Highlights

  • Since inception total return: 21.9%
  • Since inception Alpha versus S&P 500 Index: 5.9%
  • Beta versus S&P 500 Index: 0.95
  • Correlation versus S&P 500 Index: 0.72
  • Annualized Volatility: 5.5%
  • Sharpe Ratio: 4.47
  • Tracking Error: 1.16%
  • Information Ratio: 0.37