Letter to our co-investors 1Q21

Dear co-investor,

In the first quarter, the trend that began with the announcement of the successful launch of the COVID-19 vaccines in November 2020 continued, characterized by the outperformance of companies with more cyclical businesses, as well as those of smaller size and less liquidity. In this “new” market environment, our funds have had an excellent performance, getting close to or even exceeding their all-time highs. Horos Value Internacional gained 21.5% over the quarter, compared to 8.9% in its benchmark index. In the same period, Horos Value Iberia returned 13.0%, beating the 5.4% rise of its benchmark. Since inception of the Horos funds (May 21, 2018), Horos Value Internacional has returned 6.4%, while Horos Value Iberia -1.6%. Since 2012, the international portfolio has gained 160% and the Iberian portfolio 146%, compared to 182% and 59% in its benchmark indices, respectively.

On the other hand, next May Horos will celebrate its third anniversary, and we can certainly not say that it has been a bed of roses for those of us who are part of this family. In these years we have lived through a period of great political and economic uncertainty (Trump, China, brexit…), in addition to the worst pandemic that humanity has suffered in the last century. A period that, as we have explained throughout our communications, has severely hindered our investment philosophy, with the specialized press announcing the death of value investing. To navigate these turbulent waters, it has taken a lot of patience, calmness and conviction in our work. Personally, the Stoic philosophy, to which I regularly refer, has been a great compass to guide me. I will devote part of this quarterly letter to describing some of its (surprising?) similarities with the value investing philosophy.