Introducing The Event-Driven SMID Cap Value Portfolio

By Ironwood Investment Management

Inscribed in bronze on the Statue of Liberty is an inspiration for value investors:

“Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!”

Emma Lazarus' poem has welcomed to America generations of people that blossomed when they shed the limitations of their previous homeland.

 

American investors

 

American Way

Immigrants like Albert Einstein, Sergey Brin, Indra Nooyi, Jan Koum, Arnold Schwarzenegger, David Ortiz, and countless unnamed others, had tremendous talent and ideas that were hidden, under-utilized, and constrained.

They accepted the idea that with a significant transition, combined with hard work and perhaps some good fortune, they could bring new prosperity to their lives.

We believe that successful investing can borrow from Ms. Lazarus' words. We seek to select companies we believe to have solid assets and tremendous potential that have similarly been hidden, under-utilized, and constrained.

 

Bonus

Through a significant transition, such as new leadership, a spin-off transaction, or exiting from bankruptcy, infused with hard work and perhaps some good fortune, companies can rise to new prosperity.

From an investor's perspective, this pending prosperity can come with a bonus: shares of these companies often trade at depressed prices as investors bypass them in their pursuit of already- strong and well-recognized stocks.

At the intersection of potential prosperity and depressed share prices is the foundation for our event-driven strategy.

 

Performance

The Event-Driven SMID Cap Value Strategy returned 6.37% in the first quarter, net of fees, compared to the 3.02% return of the benchmark Russell 2500 Value Index and the 0.95% return of the S&P 500 Index.

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