Norse Capital is a private investment fund specialising in ASX and US equities and equity derivatives. The fund’s objective is to preserve and compound wealth with lower risk and no leverage through a long-biased portfolio of shares, exchange-traded options and futures, and cash.
Portfolio Construction
As a private wealth vehicle, Norse Capital has an open mandate free from institutional constraints. The fund can concentrate on its best ideas, is not bound by index, market capitalisation, or geographic restrictions and can focus on generating long-term capital returns and income in excess of an equity index benchmark.
A substantial component of the fund is invested in high conviction small/micro cap equities. With low (or no) analyst coverage, less liquidity resulting in more inefficiencies and a lower correlation to the market, research has shown that small cap stocks have displayed significant long-term outperformance vs their larger cohort.
In addition the fund holds a global equities component that provides diversification and exposure to market themes and technologies that are underrepresented on the ASX which represents only ~2% of the world’s stock market capitalisation.
The fund holds a significant cash component (historically ~25% on average but can be any level). The high cash weighting gives the portfolio optionality to take advantage of market opportunities and acts as a buffer in downturns. Although cash can act as a drag on performance in rising equity markets, the true value of cash manifests itself to lower risk when most needed. The fund aims to outperform the market despite the significant cash weighting.
In addition to cash, a proactive hedging overlay is used as a further risk-management tool to protect a portion of the portfolio from partial downside moves in equity markets.
Investment Process
Norse Capital uses a common sense bottom-up approach, casting a wide net to evaluate potential investments. Each prospect is put through an investment filter to whittle down candidates against a checklist which may include a fair value estimate, evidence of good management, sector tailwinds and risks. A minimum investment horizon timeframe of 2-5 years is applied to see through the noise of short-term market fluctuations. The goal is to find shares in good quality companies that exhibit a combination of growth and reasonable prices.
Management
Curtis Larson has over 20 years experience in financial markets, managing portfolios for investment banks in several financial centres around the globe and as CIO for a hedge fund. Norse Capital was established prior to 2013 to manage Curtis’ family investment portfolio which represents the substantial portion of the family’s liquid assets.
Curtis has an MBA from Yale University and a B Sc. in Computer Engineering from the University of Alberta. For more information click.