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Investment
Strategy
These
are the basic features on which our investment
strategy is established:
Value-oriented research driven. We invest only in businesses
we understand. We are not market timers. We do not use
derivatives for fund leverage.
Long and medium terms investment horizon.
Look for quality companies with superior management, sound
businesses, high growth potential and corporate policies
oriented to create shareholder value.
On-the-scene investors who seek to cooperate pro-actively with
the companies in order to add value to the business. Active
partner approach, rather than passive minority shareholder.
Establishment of a close relationship with management of these
companies.
Objective: To generate a real return of 15% to 20% p.a.
Our
investment strategy involves two major tasks:
i
- Selection work, where we seek to pick companies to invest in,
based on an accurate, detailed, and wide-ranging
identification of intrinsic value;
ii
- Monitoring work, where we not only follow closely the
development of the companies, but also work with the
management team to improve the company’s corporate
governance practices and access to the capital markets.
Since
the beginning, Dynamo has developed its own skills at studying
and monitoring companies that transcend the orthodox
definitions of the research departments of investment banks
and brokerage houses. It is our conviction that only
continuous and in-depth study of a company and the sector to
which it belongs, enable an accurate perception of its present
and future value.
In
this context, we do not attempt to predict the Brazilian
equity market’s short-term movement, nor do we ever invest
in companies where we have insufficient knowledge of the
underlying assets. Research is the basis for our investment
decision and knowledge is our best criteria for risk
management.
Based
on the identification of a company’s intrinsic value, Dynamo
seeks to work together with the company to fully realize this
value in benefit of all the shareholders.
As
active shareholders, we shall constantly recommend corporate
decisions to create maximum value creation and liquidity for
all shareholders. In the vast majority of cases, the interests
of the controlling shareholders are aligned with these
objectives, and Dynamo maintains a cordial collaborative
relationship with them. However, occasionally, we are required
to defend our rights through the legal tools available to
minority investors in Brazil.
As
active shareholders, we may assign members of the boards (audit,
directors, and consulting) for some companies in our portfolio.
We have also taken determining action in a number of
operations, where the process of adding value for the minority
shareholders was unquestionable.
In
turn, our unique investment philosophy has some specific
impacts on the features of our funds.
Little IBOVESPA correlation. Greater
alignment with the FGV-100 and the IBX.
Low portfolio turnover.
Reduced risk: Measured by volatility, our funds’
risks have been substantially lower than the risk of all
market indices (IBOVESPA, FGV-100, IBX).
The trend is for our funds to rise less
precipitously and to drop less sharply.
Excellent diversification strategy for indexed
investment portfolio focused on liquidity.
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