Inflection Point Investments: A Long-Short Equity Fund for Family Offices
London-based Inflection Point Investments’ long-short equity fund invests in global small/ mid-cap uniquely focused on Technology disruption. The team consists of experienced managers with 50+ years of combined stock-picking experience in this area and the fund has over 10 year track record.
The fund’s main activity is to take long positions in listed small/mid-cap companies (typically €100mn-€3bn in size), positioned at the bottleneck of 3-5 key Emerging Growth Technology themes. These themes are selected to reflect major structural technology shifts that the firm sees persisting for many years such as the rise of e-Commerce or Emerging Market technology adoption. The key beneficiaries of these shifts are identified by ‘drilling down’ into the value chain. Inflection Point characterises ‘bottleneck companies’ as those providing a crucial product/service, typically with high barriers to entry around technology, process know how or first-mover advantage.
As a by-product of extensive research into each long theme, the managers sometimes discover interesting shorting opportunities, which may enhance returns, especially during times of large valuation bubbles. Shorts are categorised as either ‘fakes’ or ‘dinosaurs.’ A ‘fake’ is a company which the market believes to be at the bottleneck of an Emerging Growth theme, but where Inflection Point’s checks and detailed knowledge of the space suggest otherwise. A ‘dinosaur’ is a company with mature technology whose profits seem likely to erode as a direct consequence of the newer, faster-growing small businesses held on the long-side of our portfolio.
The portfolio managers apply strict criteria before committing capital to short ideas and look for unsustainable earnings, excessively high valuation, a weak balance sheet and the likelihood that external finance will be needed over the long-term for the company to remain as a going concern.
For further information please inquire here or contact Pajani Singah,
Partner at T:0207 936 4240 or pajani.singah@ipinv.com
