ASSET ALLOCATION · INVESTMENT NEWS
InvestmentOfficer Interview with Max Severijns - August 28, 2023
Ansgar John Brenninkmeijer, the fifth-generation member of the C&A family, read a popular investor book, set up a fund without any experience, had it blessed by an investing priest and has beaten "virtually all indices" ever since.
The search for Ansgar John Brenninkmeijer leads to striking results. At a young age he was treated in a psychiatric institution. He was arrested twice for resisting the corona measures, and he was briefly held in a police cell.
Brenninkmeijer remains calm about it. According to him, the media coverage, in which he is characterized as "recalcitrant" and "extrovert", does not rhyme with his actual character. In an interview with Investment Officer, he shares: “I sometimes force myself to be an extrovert, but actually I am an introvert who likes to read. I'm just an investor.”
Value Machines Fund
Still completely unfamiliar with the financial industry, Brenninkmeijer read Benjamin Graham's book The Intelligent Investor in 2012, and decided to start an investment fund that follows Graham's principles, despite his lack of experience.
After asking around in his network who knew about Graham's method, he ended up with his current partners Hendrik Oude Nijhuis and Björn Kijl. Together they founded the ValueMachinesFund in June 2018, which has since been managed from an attic room in the Overijssel village of Losser.
To save costs, it was decided to invest outside the supervision of the AFM, but the application for a license is now being prepared.
A blessed fund
Brenninkmeijer says that with the approval of his partners, he had the fund blessed by a priest friend with investment experience. This used to happen when a new C&A store was opened, he explains. "Since then we have been leading a blessed existence," says the fund manager.
In his own words, it did him no harm. The fund with 50 million euros under management has an average net return of 13.3 percent per year since its inception. Initially, the participation price was 100 euros, which is now 191 euros, the highest level ever.
According to Brenninkmeijer, the estimated net asset value of the individual participations is 327 euros. "That's a margin of safety of 42 percent," he says, quoting Graham.
The more than 150 participants in the fund are mostly entrepreneurs, relatively often active in the agricultural sector, says Brenninkmeijer. "Farmers and market gardeners usually don't need complicated models, but a clear story."
Buy more until Sint Juttemis
In line with the method of Benjamin Graham and his student Warren Buffett, Brenninkmeijer and his colleagues search the world for companies with structural profit growth, economies of scale and a relatively high return on invested capital. The strategy revolves around reacting to market movements rather than predicting them.
“When prices rise, we take profit; if they fall, we buy up. In the event of a steady fall in the price, we will in principle continue to buy up to Sint Juttemis,' he explains.
The strategy doesn't get much more complicated than that. As long as the companies are systematically profitable and the share price is below the 'estimated commercial' value, they are attractive to Brenninkmeijer. He makes an exception for China and banks.
“We do not want to invest more than 20 percent of the fund in China because there is a risk that the government will nationalize companies at some point. We don't really understand much about banks, so we follow Warren Buffett's advice: don't invest in companies you don't understand," says Brenninkmeijer.
The fund has between 15 and 50 stocks. The largest position in the portfolio is currently the US company Elevance Health. “Profit from American healthcare companies flows to ‘capitalists’ in the Netherlands, among others,” Brenninkmeijer wants to add immediately. "That is incredibly unfair, but we benefit enormously from it."
As manic as the market
“It is known that I am manic-depressive,” says Brenninkmeijer casually. When asked about the consequences of this for the fund's investment policy, he says matter-of-factly: 'I am a bit too impulsive to make investment decisions myself, my partners do that.'
'Because I am bipolar, I constantly have to ask myself: am I crazy, or is the world crazy?', Brenninkmeijer explains. I recognize the whims to which my own character is subject in the capital market. I know how to deal with the euphoric stock market mood one day and the plummeting share prices on the next.”
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