My passion for investing arouse at age 18 and has stayed with me ever since. I bought my first share while studying. I didn't know Warren Buffett or value investing at the time. Fortunately, that wasn't a handicap for my investment success. Even then it made sense to me that the purchase price had to be well below the intrinsic value of a business in order to make money “riskless”. It is no coincidence that I have remained loyal to value investing ever since.
My professional career had been mapped out since the initial spark during my Abitur.
I studied economics at Martin Luther University, was deputy chairman of the university's academic investment society, and did numerous internships at financial institutions, including at DIT fund management, today's Allianz Global Investors.
I started my professional career as a portfolio manager at Union Investment, one of the largest asset managers in Germany, where I was responsible for European small and mid caps including responsibility for specialized fund mandates. In my subsequent professional positions, I worked as a senior investment analyst at Frankfurt Performance Management, an asset manager specializing in value investing, and as a senior investment manager in the field of listed companies at Capiton Value Management AG, an affiliated company of the private equity house, Capiton AG.
Most recently, I worked for six years as a portfolio manager at Shareholder Value Management AG, an investment company specializing in value investing. I was responsible for investments in the three-digit million range in the investment fund, Frankfurter Aktienfonds für Stiftungen, and was able to increase the fund assets entrusted to me with far above-average returns compared to the market and the overall fund.
Despite having enjoyed the responsibility for the success of the mandates and the company during my last professional position, I decided to finally put my long-cherished project and innermost wish into practice.
I founded MAXVAL Capital Management with the aim of setting up a fund that I would wish for as a fund investor if I were not a portfolio manager.
My passion for value investing has allowed me to master every professional challenge so far and I have always enjoyed the personal development that goes along with it. I now look back on more than 20 years of investment experience and have lived through many stock market cycles. Despite turbulent market phases, value investing has always worked - or perhaps because of it.
I have analyzed hundreds of companies from almost all industries and studied the actions of managers, from small caps to mega caps, in Germany, Europe, North America and other regions of the world. Value investing works - regardless of industry, company size and region. I have acquired fundamental knowledge of many business models and built up a network of board members, industry experts and befriended value investors.
Investment success is not rocket science, but the result of consistently implemented and successful investment strategies, internalized principles and values, solid craftsmanship combined with common sense and above all discipline, patience and experience.
Successful investing is simple, but not easy. I am convinced that lasting investment success is exclusively the result of rational investment decisions over many years and decades. In my view, these can only be achieved through a superior interpretation of publicly available information – in the sense of being different from the majority of market participants – in order to recognize mispricings and an appropriate personal temperament to profitably exploit them. The former requires an extremely high degree of continuous learning and the latter is contrary to human nature. It is the mental mindset that separates a successful investor from the rest of the herd and turns the craft into an art. This is why sustainably successful investors are a rare species.
The amount of capital under management is the measure of success in the fund industry. For investors, however, the performance of their invested assets is the measure of all things. However, this is often not the focus of interest. Most asset managers aim above all to increase managed volumes and thus their own profits. The long-term capital growth of their customers is secondary.
Some providers apply the investment philosophies of Warren Buffett and other investment legends for marketing purposes rather than in fund management, frequently lacking their reflection in portfolios. Communication with fund investors is very frequent and focuses on temporary events and short-term stock price changes that bear little or no relevance for the long-term performance of the fund's invested capital. Some of the publications predominantly possess entertainment character. The main aim of the show is to convince potential investors to shift their assets into vehicles of the marketing-savvy provider, often to the detriment of fund investors already invested.
Interested investors often looks in vain for honest communication, in which the long-term generation of added value by the manager is compared with objective standards.
Instead, a lot of superfluous information with a short half-life is presented, which in the worst case scenario leads investors to procyclical investment behavior – a typical pattern that also pushes the long-term realized returns of the investors significantly below the usually already mediocre fund returns. There are countless studies that show the vast majority of actively managed funds – sometimes up to 95% depending on the category and time period – destroy value relative to their investment universe.
This double effect of procyclical investor behavior combined with mediocre fund returns costs fund investors many billions every year.
The cost of actively managed funds is one reason for widespread underperformance. But there are a number of other reasons that are far more serious. Incentives and remuneration systems that allow managers to stick closely to the benchmark or fuel high risk taking, a bias of the investment manager towards increasing the amount of managed assets instead of an above-average performance of the invested capital of fund investors, economically dubious investment strategies, high portfolio turnover due to high transaction activity, a focus on short-term price movements and so-called newsflow, hierarchical structures in fund management and so-called investment processes often lead to suboptimal or even irrational investment decisions, which decimate the long-term achievable returns of the investors in some cases significantly more than the already high fund costs.
Passive index funds do not face most of these challenges and, by definition, are as good – or bad – as the underlying stock market they track. In the end, however, it remains only average and on top of that, the fund investor has to decide for himself which segment of the stock market (e.g. Global, China, Healthcare) to invest his capital into and when to do it. Fund investors who invest in passive index funds are also exposed to the risk of return-reducing, procyclical investor behavior. The aim must be to be better than the market. Anyone who invests in passive funds has already given up this aspiration.
MAXVAL works with leading and first-class service partners in their respective fields of activity in order to be able to concentrate solely on the exercise of its core competencies in fund advisory and investor communication.
