Varenne’s investment philosophy is built on our commitment to 100% proprietary research and based on facts and figures. We follow a strict ‘brokers are not welcome’ policy and never make use of sell-side research. With this disciplined approach as a foundation, we develop complementary investment frameworks and combine them in a single strategy. The goal is to optimize portfolios’ risk-return profile while at the same time efficiently employing the balance sheets of the investment vehicles that we manage.
Currently we operate several investment frameworks within the Long Equity, Short Equity, Merger Arbitrage and Tail Risk Hedging space. Each framework stems from years of research and development and comprises proprietary methodologies and formalized processes. They benefit from a dedicated team of analysts and are supported by bespoke information systems. Idea generation originates internally from screening purpose-built fundamental and behavioral databases.
Each book is independent with exposures determined by a rule-based portfolio construction model comparing investment merit metrics. The aim of the model is to maximize long-term returns, reduce correlation to indexes and adapt portfolio compositions to changing market and macroeconomic conditions. Unlike pure player funds, our approach allows investment teams to focus exclusively on the most favorable opportunities as it relieves them of the obligation to deploy capital when they do not find ideas that meet our risk-reward criteria – we are happy to stay on the sidelines on one or more of our frameworks when we believe it is the most sensible investment decision.
Finally, we strive to add value through a fully integrated infrastructure ranging from idea generation to direct market execution.