According to Vanwittembergh, manager Norris is indeed at his best during a market correction because that provides more opportunities in both the long and the short book to profit from mispricing in the market. “It’s easier to generate alpha in downward markets for him. I therefore increased my allocation to 5% of my fund-of-funds in October,” he says.
The best proof of Norris’ ability to identify opportunities on the short side, is probably that the long/short Absolute Return Fund has performed better than the long only European Alpha Fund, which has the same long positions as the Absolute Return Fund. “Barry is consistent in his ideas and vision, and doesn’t change positions all the time because he believes in his analysis and vision that corporate earnings are the single main driver of share prices on the long term. And that pays off,” says Vanwittembergh.
Transparency
Investing in the Argonaut Absolute Return fund of course comes with a strong key man risk: the investment process of the fund is centred on lead manager Barry Norris. But Vanwittembergh brushes any reservations about this aside, emphasising the good sides of investing in a small company.
“Barry Norris (pictured right) and his team are extremely transparent and open. When I send an e-mail requesting fund-specific information, for example why the fund lost money, I always get a reply within three hours. And I always get all the facts I want,” says Vanwittembergh. “With bigger companies, that’s not usually the case.” He also likes the authenticity associated with companies like Argonaut. “There is no big marketing machine behind them. They have fully deserved their success because of their track record in managing money.”
Vanwittembergh observes he shares this liking for authenticity with his clients. “They appreciate it when they see the largest position in my fund-of-funds is in Argonaut Absolute Return. They are pleasantly surprised when they see a fund they have never heard of has such a solid track record.”
