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At a glanceQuality is systematically underpriced by markets over long time periods because most investors tend to discount delayed gratification too heavily, While many of the truly exceptional businesses are household names with widely-held shares, there are numerous lesser-known enterprises that are no less commendable; The fund's hunting ground.

Fund Structure & the Redeye Roots

Redeye Capital AB is an investment firm that holds a license for discretionary portfolio management. Redeye Nordic Hidden Champions AIF is a Finish AIF fund, managed by GRIT Fund Management Company Ltd (GRIT). Redeye provides investment advices to GRIT, based on Redeye's proprietary quality rating model.

Redeye is the market-leading provider in the Nordics of ongoing strategic advisory services (Corporate Broking and Certified Advisor) with about 170 clients. In 2011, Redeye launched its corporate finance unit, which has since completed more than 150 public transactions.

Redeye has over the years provided a model portfolio called Top Picks on its website as a premium service that solely comprises companies within Redeye's research coverage universe.

Top Picks has returned about 915% (CAGR of 26.1%) over the last decade whereas the market index (OMXSPI) has returned about 113% (CAGR of 7.9%) as of December 31 2023.* The continuous outperformance is a function of stock picking, position sizing, risk management, and active portfolio rebalancing.

In May 2020, the fund Redeye Nordic Hidden Champions AIF was launched, with the purpose to emulate the success formula of Top Picks, but in a live environment, with a strong performance so far – up 76.2% since inception May 1, as of December 31 2023*

* Investing in funds is always subject to risk. The value of your investment may rise and fall. Past performance is not an indicator of future performance. Investors may lose parts of or all of the invested capital. The fund Redeye Nordic Hidden Champions AIF is especially exposed to risks regarding large price fluctuations (volatility) and low turnover (liquidity).

UNPARALLELED ACCESS TO KNOWLEDGE
AND INSIGHTS

Redeye has the largest Nordic small cap team of about 30 analysts who have developed niche expertise and extensive relationships with corporate leaders in the technology and health care sectors.

The coverage universe of about 170 stocks has a strong focus on emerging growth companies that are many times neglected by institutions as their business model has not been tested across cycles.

Covered stocks are typically favourably exposed to long-term trends as they are creators and adopters of the transformational innovations that are leading the next wave of innovation. To catch these growth stocks early in their growth cycle, before they experience their big run-ups, Redeye’s analyst perform extensive channel checks and focus on company fundamentals and long-term value rather than the stock price.

Redeye's stockpicking centric culture means it only hire analysts that are passionate about investing and the industry verticals they cover. The analysts all have an insatiable curiosity and an ability to dig deep.

EXPLOITING THE QUALITY DIMENSION
OF VALUE

Accounting for both value and quality has, according to Redeye's backtesting, yielded strong performance improvements over traditional value strategies. The backtesting analyzed the 1-year past performance of stocks rated by Redeye, using Redeye's rating model.

The focus is on the quality of the business and its people, in order to spot something not yet evident in the reported numbers but that should show through over time.

To develop a deep understanding of the investment, the Redeye analysts systematically evaluate all company’s quality via a structured checklist of questions referred to as Redeye Quality Rating.

When investing in high-quality growth stocks, the biggest mistakes are likely to be decisions to sell too soon. One of the most powerful concepts in portfolio management is to let your winners run. Being a long-term investor can be relatively easy during a bull market, but resilience is tested during extreme market volatility. After all, investing is an existential act—you are what you do, not what you think.

The protection against risk is primarily in the quality of the companies. That is why the risk management process focuses on investing in truly high-quality companies that will continue to grow over the long term. After all, if the business does well, the stock eventually follows.

Björn fahlén

co-founder & ceo redeye

Redeye Capital Investment Committee

Investment process & fund management

Redeye Capital's investment committe provides investment advices to GRIT Fund Management Company Ltd (GRIT), based on Redeye's proprietary quality rating model. GRIT is the fund manager and portfolio manager of the fund Redeye Nordic Hidden Champions AIF.