Alma Hotchkis & Wiley US Large Cap Value Equity Fund

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Overview

  • Alma Hotchkis & Wiley US Large Cap Value Equity Fund seeks current income and long-term capital growth by investing in a concentrated portfolio of undervalued large US companies.
  • Management of the fund is delegated to Hotchkis & Wiley LLC.

Share Class

NAV

Cumulative Performance (%)

Fund Inception 6 August 2014

Daily Monthly Ytd 1Yr 3Yr 5Yr Incept. Incept.Date

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.


Strategy & Manager

Funds Strategy

Investment objective: to seek current income and long-term capital growth by investing in a concentrated portfolio of large US companies

  • Investment process: analyse long term company fundamentals through in-house bottom-up research aiming to identify undervalued stocks
  • The fund typically holds 40 to 60 securities and generally invests in companies with a market capitalization above $ 3billion
  • Benchmark: Russell 1000 Value Index


Investment Manager

Hotchkis & Wiley is an SEC-regulated, Los Angeles-based investment adviser founded in 1980, specialized in US value equity and US high yield bond strategies.

  • Interests aligned with investors: Hotwhkis & Wiley is an employee owned firm– all 21 investment professionals own equity
  • George Davis, the CEO of Hotchkis & Wiley and senior portfolio manager of the fund, has over 30 years of investment experience. He coordinates the day-to-day management of around $27 billion of equity value assets
  • Hotchkis & Wiley manage $31billion

Key Persons

George Davis, Jr. CEO, Portfolio Manager and Principal

Mr. Davis became CEO in 2001. In his role as portfolio manager, Mr. Davis plays an integral part in the investment research review and decision-making process.  He coordinates the day-to-day management of Large Cap Fundamental Value and Large Cap Diversified Value portfolios, as well as represents the firm’s investment strategies to current and prospective clients. He also provides expertise and insight into the capital goods and financials sectors. Prior to joining the firm, Mr. Davis was an assistant to the senior partner of RCM Capital Management. He began his career in equity research with internships at Cramer, Rosenthal & McGlynn and Fidelity Management & Research.

Mr. Davis received his BA in Economics and History and MBA from Stanford University.

 

Scott McBride, CFA Portfolio Manager and President

Mr. McBride became President of Hotchkis & Wiley in 2016. In his role as portfolio manager, Mr. McBride plays an integral part in the investment research review and decision-making process. He coordinates the day-to-day management of Large Cap Fundamental Value, Large Cap Diversified Value, Global Value and International Value portfolios, as well as represents these strategies to current and prospective clients. He also provides expertise and insight into the consumer, financials, healthcare and technology sectors. Prior to joining the firm, Mr. McBride was an associate consultant with Deloitte Consulting and worked as an investment marketing analyst with Fidelity Investments.

 

Patrick Meegan, CPA Portfolio Manager

In his role as portfolio manager, Patrick Meegan plays an integral role in the investment research review and decision-making process. He coordinates the day-to-day management of all High Yield bond and Capital Income portfolios. He also provides expertise and insight into the financials and healthcare sectors. Mr. Meegan began his career at H&W as an investment analyst and became portfolio manager in 2001. Prior to joining the firm, Mr. Meegan was an audit manager at Arthur Andersen and specialized in financial statement audits and advising clients on SEC reporting issues.

Mr. Meegan, a Certified Public Accountant, received his BA in Business Administration with honors from California State University, Fullerton and his MBA with honors from the Anderson School of Management at the University of California, Los Angeles.

 

Judd Peters, CFA Portfolio Manager

In his role as portfolio manager, Mr. Peters plays an integral part in the investment research review and decision-making process. He coordinates the day-to-day management of Large Cap Fundamental Value, Large Cap Diversified Value, Small Cap Diversified Value and Global Value portfolios, as well as represents these strategies to current and prospective clients. He also provides expertise and insight into the capital goods, energy and technology sectors. Prior to joining the firm, Mr. Peters was an analyst in the corporate finance department of an investment banking firm.

 

Patty McKenna, CFA Portfolio Manager and Principal

In her role as portfolio manager, Ms. McKenna plays an integral part in the investment research review and decision-making process and represents the firm’s investment strategies to current and prospective clients. She also provides expertise and insight into the consumer and healthcare sectors. Prior to joining the firm, Ms. McKenna was an equity analyst at Trust Company of the West. Before entering the field of investment management, she has worked for five years in corporate finance at Bankers Trust and then at Fieldstone Private Capital Group. Ms. McKenna began her career as a forensic accountant in 1983.

 

Sheldon Lieberman Portfolio Manager and Principal

In his role as portfolio manager, Mr. Lieberman plays an integral part in the investment research review and decision-making process and represents the firm’s investment strategies to current and prospective clients. He also provides expertise and insight into the energy and technology sectors. Prior to joining the firm, Mr. Lieberman was the chief investment officer for the Los Angeles County Employees Retirement Association (“LACERA”). At LACERA, he was responsible for overseeing the fund’s investment activity, as well as developing and implementing investment policy, strategy and guidelines. Prior to his position at LACERA, he was manager of trust investments at Lockheed Corporation.


Statistics & Commentary

Performance

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

Sector Breakdown as a % of AUM

as of 31/10/2018

Portfolio Characteristics

as of 31/10/2018
Main indicators Fund Index
No. of securities 54 726
Weighted Average Market Cap ($bn) 98.4 117.8
Median Market Cap ($bn) 27.5 9.2
Projected P/E Ratio 10.4x 13.2x
Price/ Normal Earnings 8.8x 14.3x
Price/ Book 1.4x 2.0x
Price/ Sales 1.0x 1.5x
Projected EPS Growth 5.4x 5.5x
Active share (%) 82.3 -

Top 10 Position Details

as of 31/10/2018
Security name Sector % AUM
American International Group Financials 4.85
Hewlett Packard Enterprise Information Technology 4.27
Wells Fargo & Co Financials 4.10
Citigroup Inc Financials 3.71
Oracle Corp Information Technology 3.49
General Motors Co Consumer Discretionary 3.33
Marathon Oil Corp Energy 2.94
Discovery Inc-C Communication Services 2.86
Microsoft Corp Information Technology 2.76
Goldman Sachs Group Inc Financials 2.73

Investment Manager's Commentary

as of 31/10/2018

Market Review and Outlook

Market:

The S&P 500 Index returned -6.8% in October, though it was down more than -9% before markets partially recovered over the last two trading days.  Non-cyclicals held up better than cyclicals; consumer staples and utilities were slightly positive in the month while consumer discretionary, energy, and industrials each declined more than 10%.  Investor concerns regarding US/China relations and rising interest rates, which seemed to have been percolating for months, came to the forefront.  Vice President Pence delivered a contentious speech on Chinese relations, and several multinational companies reported that tariffs and slowing Chinese demand were affecting their businesses.  Meanwhile, the Fed continued to raise rates, which combined with increasingly bearish sentiment in equities, caused the 10-year treasury yield to increase to the highest levels since 2011.  We find it prudent to avoid sectors where valuations continue to appear stretched, particularly in trying times.  The portfolio’s current discount to the market is substantial: the portfolio’s price-to-normal earnings ratio is 8.8x, compared to the Russell 1000 Value Index at 14.3x and the S&P 500 Index at 17.6x.  The portfolio’s price-to-book ratio is 1.4x, compared to the Russell 1000 Value Index at 2.0x and the S&P 500 Index at 3.2x.

 

Fund

The Hotchkis & Wiley Large Cap Fundamental Value portfolio underperformed the Russell 1000 Value Index in October.  Stock selection in financials, energy, and consumer staples detracted from relative performance in the month.  The underweight allocation to consumer staples and utilities, along with the overweight position in energy hurt also as non-cyclical sectors held up better during the market decline.  Positive stock selection in industrials, technology, materials, and utilities helped relative performance.  The underweight position in materials and overweight position in communications services were modest positive contributors as well.  The largest individual detractors to relative performance were AIG, Apache, Marathon Oil, Hess, and State Street; the largest positive contributors were General Motors, Wells Fargo, Discovery, Goldman Sachs, and Comcast


Facts & Documents

Facts

Fund Domicile: Luxembourg

Management Fee: 0.75% p.a. for I shares

Fund Type: UCITS SICAV

Fund Launch: 6 August 2014

Base Currency: USD

Depositary, Administrator, Transfert Agent: BNP Paribas Securities Services (LU)

Dealing: Each day with a 1-day notice

Cut-off time: 5 pm CET

Management Company: Alma Capital Investment Management

Investment Manager: Hotchkis & Wiley Capital Management, LLC (US)

Fund Managers: George Davis, Scott McBride, Judd Peters, Patty Mckenna, Sheldon Lieberman, Patrick Meegan

Countries where the fund is registered:
France, Germany, Luxembourg, Switzerland, United Kingdom, Austria

Identifiers:

Institutional USD Capitalisation share class
ISIN: LU0963547111   Ticker: ALDCPBI LX    Launch: 6 Aug 2014

Retail USD Capitalisation share class
ISIN: LU0963547970   Ticker: ALDCBRU LX    Launch: 21 Nov 2017

Documents

SICAV ALMA CAPITAL INVESTMENT FUNDS
  1. ACIF Prospectus