RVF’s investment strategy consists of investing in highly undervalued North American securities that possess a margin of safety.
The fund is loosely modeled after Warren Buffett’s original Buffett Partnership. This is a go-anywhere market cap and sector agnostic mandate.
Securities that are relatively cheaper (based on fundamentals) than their peer
group but possess higher upside potential.
This category may also contain securities that are relatively undervalued compared to historical valuation. Short positions in companies that are relatively overvalued may be taken for risk reduction & funding purposes.
Private Owner Basis: Securities that are inexpensive on an absolute basis. Total enterprise value needs to be substantially lower than private market value. Typically, the equity is trading below net tangible book value or the company has an exceptional track record of free cash flow generation and trades at a very low current multiple of free cash flow.
In this category, there is no specific timetable in which the undervaluation may correct itself.
Securities whose financial results depend on a corporate action or event rather than general market conditions. Corporate events such as
mergers/acquisitions, liquidations, reorganizations, spin-offs, split-offs etc., lead to work-outs.