How is Amiral Gestion different from other companies?
Amiral Gestion is a partnership of highly-empowered investors.
Sextant fund managers are Amiral Gestion shareholders, and invest substantially on a personal basis in their funds. The benefit for the funds' performance and for the company in the long term is the key interest for all the partners.
What do you mean by "committed entrepreneurs"?
Our employees are considered "committed entrepreneurs" because they are shareholders in Amiral Gestion, and in the companies in which they invest through the Sextant funds, in which they hold units. The performance culture is thus deeply anchored in our values, making it possible to maximize the alignment of our interests with those of our unit-holders.
When founding the company, we identified a number of challenges. On the one hand, there are several drawbacks to single-person management, in particular the fact that an individual is not always right. On the other hand, management by committee or collegial management also presents a major risk, that of investment based on consensus, which rarely leads to performance.
Therefore, we wanted to offer our unit-holders a different solution: sub-portfolio management. This means that each fund is subdivided into a series of groups, each supervised by a manager. These managers have the liberty to invest as they see fit, provided that they can explain their actions to the other members of the management team, withstand criticism, and comply with the company's management model and procedures. This technique enables everyone to share and follow the best ideas of each person or opt for a different approach, and as a result, we avoid the unfortunate circumstance of “group think.”
For us, sub-portfolio management (illustrated in the following diagram), which is not very common in today's market, is the hallmark of our business. It has fulfilled its purpose of maximizing trade, and has enabled each member of the team to assume responsibility and showcase their talents. Finally, and this is especially important to us, it allows us to identify our mistakes, so we can analyze them, understand them, and move forward.
What do you mean by "Value"?
Many publications are devoted to Value Management, but there are as many definitions as there are authors.
Benjamin Graham, the author of "The Intelligent Investor," first developed this concept, which places the idea of a "safety margin" at the center of the investment. The idea is to buy a stock at a lower price than its intrinsic value.
The Sextant philosophy is deeply rooted in the fundamental study of companies and their value. The goal is to buy high-quality stocks for less than their intrinsic value. This seems simple, but it is a difficult process for many reasons. It must be impervious to fashionable trends and shun Mr. Market, an allegory invented by Benjamin Graham to illustrate the often-irrational behavior of the market.
Since it is impossible to predict changes in share prices over the short term, we focus on studying the companies in order to invest at the best price. That is why we define ourselves as "Value" investors.
What do you mean by "long term"?
"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years" -Warren Buffett.
When we buy stocks, it isn't to "play the market" and sell them for quick capital gains. We invest in companies for their intrinsic qualities and because they are undervalued. A company's lifecycle cannot be summed up by its stock market performance. Our investment horizon is determined by the company, not the stock market. Therefore, the winding down of an investment is linked not to a specific period, but rather to the end of the company's undervaluation. We are prepared to wait many years until the undervaluation subsides. This is an important competitive advantage, as many of our peers forego the notion of buying options that offer no prospect of rapid appreciation, when often they present the best opportunities.
How is the concept of risk incorporated?
Risk is a major factor in any investment and, for the past several years, the asset management industry has been subject to tighter regulations in this regard. Therefore, Amiral Gestion has implemented all of the systems and resources required to respond to these in the best possible way.
But let's focus on the issue. What is the real risk?
Is it volatility? We don't think so.
"I would much rather earn a lumpy 15% over time than a smooth 12%," said Warren Buffett. Don't forget that volatility is the best friend of the good investor, and the worst enemy of the bad speculator.
The real risk is above all being wrong in our investments. At Amiral Gestion, the concept of risk is primarily incorporated into the selection of the assets that you hold through our funds.
A good company, regardless of the volatility of the market and the economic situation will perform well. In contrast, even where there is low volatility and high growth, a poor-quality company will be penalized and your investment will be lost. Therefore, we make systematic use of a "quality score" for all holdings in the portfolio. This quality score evaluates the robustness of the economic model and the past performance of the company and its management. The aim is to be able to consistently rank our ideas based not only on their potential and their risk.
What funds are eligible for PEA?
A fund is eligible for PEA if it meets a certain number of management requirements. The main one requires that the fund always have at least 75% of its investments in the equity of companies with a head office located in a European Union member state. A fund's compliance with these requirements makes it eligible for PEA and offers very significant tax benefits on capital gains.
In our product range, Sextant PEA, Sextant Europe, and Sextant PME are eligible for PEA.
In 2014, the maximum investment in a PEA increased from EUR 132,500 to EUR 150,000, and the PEA PME was created with the goal of directing savings to European SME-ISEs. Our Sextant PME fund is also eligible for this new instrument and meets these requirements. Its celling is €75000.
In what way is Sextant Grand Large more defensive?
Sextant Grand Large is not an equity fund like the other Sextant funds.
It enjoys greater flexibility in its level of exposure to the equity markets. While funds such as Sextant PEA and Sextant PME are required to have a minimum of 75% invested in equities, Sextant Grand Large may have only 20% invested in this class of assets. This freedom partly explains the more defensive nature of this fund.
Another important factor in the defensive nature of the fund lies in the stock picking strategy. In effect, only assets that in our opinion represent the lowest potential for long-term decline – either because the company is top quality or because its current valuation is near floor value (such as cash, for example) – are selected for Sextant Grand Large.
What is the difference between Sextant PME and Sextant PEA?
These two funds are eligible for PEA and consequently have 75% invested in equities, just like Sextant Europe.
The difference lies in the eligibility for PEA-PME. Only Sextant PME meets this requirement of having 75% invested in equities of European SME-ISEs.
In Sextant PEA, the management team reserves the freedom to invest in larger companies.
In addition, we wanted to offer our partners a pure fund based on SME-ISEs, traditionally one of Amiral Gestion's areas of expertise. Therefore, you will only find European SME-ISEs in Sextant PME.
In contrast, in Sextant PEA we wanted to retain the greatest possible level of freedom offered within the framework of the PEA eligibility requirements. It is therefore not unusual to find American or Asian equities alongside the 75% of European companies.
Sextant PEA's investment universe is more open than that of Sextant PME.
From what amount is this private asset management program accessible?
More than capital under management, we want to provide effective solutions for our clients and satisfy their needs. Therefore, this solution is open to investors who share our philosophy and passion for investment.
The programs vary depending on the amounts committed and are adapted according to each client's personal situation. For example, it seems illogical, for reasons of cost and diversification, to consider managing paper securities for portfolios of less than EUR 1.000,000. In this case, management through a mutual fund makes more sense. On the other hand, for investments of several million euros, we occasionally help our clients set up SICAVs.
What tax schemes do you offer?
Good financial management begins with the selection of the scheme that best suits you.
Your portfolio will be managed under the most suitable contract(s) given your unique situation (share account, PEA, life assurance governed by the laws of France or Luxembourg, endowment contract or open-ended UCITS). Regardless of the solution chosen, your assets are held by financial institutions, such as Caceis Bank France, CA Luxembourg, CM-CIC Securities, Neuflize Vie, etc.
As an Amiral Gestion private asset management client, in what asset classes will I be investing?
While doing our utmost to remain within the limits of our expertise, your portfolio may, depending upon requirements and opportunities, be invested in a wide variety of vehicles – high-yield bonds, listed real-estate companies, certificates representing precious metals, holdings or external UCITS – for exposure to certain regions in the world..