Investment Philosophy

Varenne’s investment philosophy is built on our commitment to 100% proprietary research. We follow a strict ‘brokers are not welcome’ policy and never make use of sell-side research. We strive to solve equations differently and add value by developing complementary investment frameworks combined in a single strategy with the goals of optimizing risk-reward profiles and 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 one stems from years of research and development and comprises original methodologies and formalized processes. They are all individually run by dedicated teams of analysts and benefit from bespoke information systems. Each book is independent and exposures are determined by rule-based portfolio construction models comparing investment merit metrics. The aim is to maximize long-term returns, reduce correlation to indexes and adapt portfolio compositions to changing market and macroeconomic conditions. Idea generation is also specific to each framework and originates internally from proprietary fundamental and behavioral databases to which purpose-built screening and scoring systems are applied.

Unlike ‘pure player’ funds, our approach allows investment teams to focus exclusively on the most favorable opportunities and relieves them of the obligation to deploy capital when they do not find ideas that meet or exceed our risk-reward criteria – we are happy to stay on the sidelines when we believe that to be the most sensible investment decision to make.