STRATEGY

Logos Fund pursues two strategies in allocating its capital

1: Fundamental long/short strategy

The principles of 'value investing' form the foundation of our Long/Short strategy. We search for companies that appear to be under- or overvalued based on fundamental metrics like expected profit per share, cash flow generation, and/or attractive book value. We aim to buy the cheap, and sell those that are overvalued or seem to have an unsustainable business model. Depending on where we see the most attractive risk-reward profiles in the market, capital is divided between long, and short investments. This does not imply that Logos Fund’s strategy is always exactly ‘market neutral’. However, investing both on the long- and short side reduces exposure to market risk, which helps to protect the Logos Fund against severe loss of capital in case markets crash. 

Small- and micro-cap markets will be the primary hunting ground for undervalued companies as we see several advantages of investing in these specific market segments. Besides the fact that smaller companies are generally easier to understand, markets can be less liquid and therefore often not of interest to large hedge funds and institutional investors. This creates an environment where significant mispricing can occur. Investors with a long-term perspective are well positioned to profit from such price-value discrepancies.

2: Special situations

Besides our Long/Short strategy, we aim to allocate a limited portion of our capital to 'special situations' that can occur due to several types of corporate actions. Corporate actions are events that affect the securities issued by a company (e.g. mergers, acquisitions, buyback of shares, 'spin-offs', etc.). Logos Fund will mostly focus on corporate actions within the small-cap space. Some of these opportunities, although short-term in nature, provide very attractive risk-reward profiles. Furthermore, returns on such investments show low correlation with returns from the Long/Short strategy, and thereby offer an attractive form of diversification to the overall investment portfolio.