Interview: The Long-Term Vision of Horos Asset Management

Horos Asset management was founded in May 2018. It currently manages 50 million euros. It tries to invest in companies that ideally comply with five investing principles: businesses that it can understand, with competitive advantages and strong financial profile, managed by good capital allocators and with an attractive margin of safety.

Javier Ruiz, Alejandro Martín and Miguel Rodríguez are the managers of Horos Value International fund. They have worked together for the last seven years and in that period they have produced an outperforming record (12.4% per year vs 11.8% for the benchmark).

Javier Ruiz was very kind to share their long-term vision, in a worldwide investment universe but with a focus in downside protection.

Dear co-investor,

We are pleased to share our investment idea: Aercap Holdings which was presented by our CIO Javier Ruiz at the Value Spain 2019 edition.

Aercap Holdings is one of our main positions in our international strategy and one of the holdings that has contributed most to the fund’s portfolio. For this reasons, we think it is an useful exercise to present Aercap´s investment thesis so that you can understand our analytical work even better.

As always, we thank you for your confidence and remind you that we are available whenever you may wish to contact us. We will be happy to help.

Yours sincerely,

On the same date that Spring arrived, Spain’s private equity firm Qualitas Equity Group launched Horos Asset Management, in which it owns a stake consisting of individual investments made by every partner of Qualitas who manages their own money.

Horos’ investment team – led by Javier Ruiz working with portfolio managers Alejandro Martín and Miguel Rodríguez- comes from Metagestión, as does the firm’s CEO and partner José María Concejo. At Metagestión they applied the same investment philosophy currently used, for a period of six years; the formula worked to the extent that the Metavalor fund, managed until recently by the investor trio, gained 15.7% annualised over five years.

Born with a long-term view and linked to the value investment philosophy, the firm takes its name from the etymological origin of the word “horos”, which means horizon, and which was used by the Greeks to refer to the limit where heaven and earth seemed to come together.

Dear co-investor,

I would like to take advantage of this first letter to introduce Horos Asset Management S.G.I.I.C. SA, and the new and exciting project in which I have embarked on, along with Alejandro Martín and Miguel Rodríguez, the managers with whom I have been building a team for years.

Horos was born with a long-term vision. Without such, it would be impossible to carry out the value investment philosophy that characterizes us, and, as you know, requires a timeline of several years. The word “horos” was used initially by the Greeks to refer to the boundary where heaven and earth seem to blend together. From it, etymologically came the word “horizon,” and for this reason we could not think of a better word that describes the essence of this project.

The celebrated Charlie Munger, a trusted partner of Warren Buffett, advises us that the recipe to achieving satisfactory returns over time and to survive in an industry as competitive as ours requires three basic ingredients: a strong investment philosophy, a good head on one´s shoulders and belonging to an organization that reinforces both. The first two ingredients depend one hundred percent on the equity team. At Horos, we have a proven investment philosophy and process that will allow us to fulfill our primary objective of generating value to our co-investors in the long run.

However, getting the third ingredient to the level that we need it may not always be so easy. However, at Horos, we believe a good way to achieve this is with a project where the management team also owns it. We think this is the only way to achieve a true alignment between the style of investment and the management of the organization. That’s why Alejandro, Miguel and I are delighted to become founding partners of Horos. As project partners we have a direct, vested interest in its success. As such, we know that we will all benefit from a stable framework for projects aimed at achieving long-term objectives. Moreover, the three managers are as we have always been in the past: investors of the products we manage. Therefore, we eat what we cook.

Horos will also have Qualitas Equity as a founding partner. Qualitas is a private equity enterprise with a proven track record and a prestige that demonstrates its ability to share and understand the needs of a project with this kind of scope. In addition, we will have José María Concejo as CEO and founding partner of the project. José María will bring extensive experience in the industry and his leadership will allow the fund managers to focus entirely on the execution and management of our strategies.

Our objective at Horos is to always grow in an orderly and consistent manner. We will do so only when the structure allows it, and only through products that can add value to the investor and that have a consistent investment philosophy. Hence, we will be starting with two investment funds, Horos Value Iberia and Horos Value International, and a third, a pension plan strategy, called Horos International PP. These three products will all exbibit the same investment philosophy with which we have managed previous funds over the last many years.

In order to maximize the effectiveness of the operation for the investor, we will utilize Finametrix, the best technological platform in the market. Thanks to the facial recognition system via webcam, all contracts that have single ownership will be able to manage their accounts from the very first minute, without having to deploy any paper sources.

From its inception, Horos will be an asset management firm where the management team is fully aligned with you, the investor. We will pursue the same investment philosophy that has allowed us to achieve very solid results in recent years, which will, as a central objective, generate value for its co-investors.

In closing, I can say no more than to welcome you into what I hope will be your home for many years to come, and to thank you wholeheartedly for your trust in this management team.

With sincere regards,

Javier Ruiz, CFA
Chief Investment Officer
Horos Asset Management S.G.I.I.C. SA