Investment in Securities

Investments in listed securities are made by Orfeo Capital SGIIC, S.A., an investment management company registered and regulated by the Spanish CNMV (National Securities Commission), a counterpart of British FCA (Financial Conduct Authority), which in turn is governed by the laws and regulations dictated on this regard by the European Union.

Orfeo Capital SGIIC is the result of the transformation of an EAFI (counterpart of British Independent Financial Adviser), which was also regulated by the Spanish CNMV. The same EAFI born as the natural evolution of an important family office that opens its doors to the request of external investors who like the wealth management carried out by said family office.

Investment Philosophy

The management principle that prevails in Orfeo Capital SGIICis the same as that of any family office: the Wealth’s Preservation. To ensure that this principle is dismissed or left aside, team members of Orfeo Capital invest the majority of their financial patrimony jointly with our investors, in such a way that they assume the future of the investments as their own.

INVESTMENT TICKET

An additional characteristic and with the purpose of eliminating the so-called “manager’s ego risk”, the maximum investment per security in each fund is limited to a previously defined amount, denominated as the “investment ticket” of the fund.

FIXED-INCOME AND SECURITIES INVESTMENT

Orfeo Capital currently manages three UCITS funds of different risk profiles, through a combination of different Securities. The investor can adapt his investment to the proper risk profile by means of a combination of Fixed-Income and Equities on his portfolio, by means of the suitable combination of these funds in their portfolio.

INVESTMENT TEAM

The team of Orfeo Capital SGIIC has an aggregate experience of over 30 years in the world of Listed Securities Investment

Selection Criteria

Equity Investment Processes

The process of selecting the stocks is done by following a strict methodology. Our long-term management experience shows that, for success to be long lasting, it must necessarily rely on a methodical and strict investment process, which has the purpose of eliminating errors derived from the ego of the managers and on focusing only in finding the intrinsic value of the companies in which we invest.

In order to fulfill the objective of Preservation of Wealth, the first thing is to look for companies that, as a first requirement, reduce the following risks:

1. Territorial concentration.

2. Intrinsic reputational risk, by product or by company.

3. Poor liquidity of the stock, by size of the company.

4. Government regulation that prevents free competition.

5. Excessive indebtedness.

Stock Analysis

Among those securities that lack these risks, we look for companies that, due to their characteristics, meet the following requirements:

1. Have them, or their products, high entry barriers, which in turn will give them a solid market position.

2. Have high exit barriers for their clients, which gives them stability and security in their income.

3. Their businesses are highly replicable in other countries.

4. Their businesses are highly scalable to other sectors.

5. Its product portfolio is broad and diversified.

And, finally, all the analysis and selection of stocks is performed internally by our team.

Classification of Investment Securities

All the analysis and selection of assets is our own, that is, that is carried out by our internal team. All of this allows us to classify the stocks in which we invest in three different categories:

Structural stocks

50-70%

From our Equity Portfolio

These are Securities that meet all our investment requirements.

OPPORTUNITY stocks

UP TO 30%

From our Equity Portfolio.

These are Stocks that are particularly undervalued because of an event of their own or from others, and have a special growth potential.

Alternative Stock

They can be 20%

Of our equity portfolio.

and are securities, since our structure we can not reach their analysis, but we trust another fund manager to do so, after a previous and thorough analysis of the fund manager.

Fixed-income investment

Investment Process

Under the assumption of the concept that it is a mistake to consider an investment in fixed-income as an investment without risk, for conservative investments we look for the most appropriate combination of Profitability v.s. Risk.

When these securities give high profitability it is because there is a high latent risk of default or convertibility in shares. And when the risk of default is minimal, they offer little profitability, but in low-interest scenarios they imply a high risk of loss by price.

We try at all times that the average duration of our fixed income portfolios does not exceed five years, and they are always US and European Union bonds. We monitor the currency risks and especially the convertibility of the bonds into shares.