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Investment Philosophy


Magna Capital’s objective is to achieve continuous long-term gross portfolio returns through Event Driven strategies such as Mergers & Acquisitions and Special Situations. Magna Capital’s event-driven approach is based on its track-record and ability to find specific corporate events and target certain returns irrespective of the direction of the broader market. As a result, Magna Capital has much lower correlation with Turkish equity markets and is likely to provide more consistent returns on TL basis.
 

With a broader focus, Magna Capital’s event-driven approach is inherently combined with a strong emphasis on value investing principles. This strategy merges opportunism and value investing with specific, idiosyncratic corporate events, providing more balanced and consistent risk-adjusted returns and hence providing a good long-term approach to portfolio management and alpha generation. 
 

Magna Capital maintains positions in companies currently and prospectively involved in corporate transactions of a wide variety including Mergers & Acquisitions and Special Situations such as restructurings; voluntary and mandatory tender offers; asset sales; division/business spin-off; shareholder buybacks and squeeze-outs. Magna Capital is not interested in distressed or bankruptcy situations. Security type is limited by publicly traded equity shares of companies on the BIST in Turkey. 

 

Magna Capital’s relatively high-return track-record is a result of its managers' industry knowledge and securities selection expertise as well as the correct identification and diversification of risks associated with the securities. Magna Capital’s returns are event rather than market driven and as such Magna Capital has very low correlation to the Turkish equity market in general. Generally event driven exposure includes a high risk to company specific developments; however, Magna Capital is able to minimise such risks due to the timing of the investments ie primarily post-announcement.

 

Magna Capital from time to time also invests in special situations where there is not yet any formal announcement. Such situations are identified by Magna Capital via fundamental research and Investment Committee’s views which are likely to result in a corporate transactions or other realization of shareholder value through the occurrence of some identifiable catalyst. Magna Capital is in a unique position to make an informed assess as to the likelihood of an M&A process commencing on which specific industries and targets as well as the envisaged timing and valuation levels at which such transaction can take place.
 

With the ability to benefit from bi-directional market moves, Magna Capital will generally remain net-long but maintain the flexibility to be net short. As market volatility creates timing prospects, the team will seek to identify and monetize on short- and mid-term opportunities employing limited leverage through margin and derivatives.