Our Investment Approach

Diranko Capital’s Opportunistic Deep Value strategy follows a value investing approach inspired by legendary investors like Benjamin Graham and Warren Buffett, focusing exclusively on long-only investments in publicly listed equities.

Our strategy is built on six core pillars, designed to enhance our chances of achieving superior long-term returns with lower risk compared to the broader market.

To achieve our goal of identifying businesses with the highest potential for outsized returns without excessive risk, we adhere to a rigorous investment process. This process narrows down a universe of approximately 55,000 publicly listed companies to a focused selection of about 10-20 investments.

1. Publicly Listed Equities

Historically, equities have offered the highest risk-adjusted returns over the long term. The higher liquidity of listed equities, compared to private equity, provides better flexibility for investors.
2. Global Scope

Global diversification helps mitigate country-specific risks. Shifting exposure from overvalued markets to more attractively priced ones offers the potential for excess returns while simultaneously reducing risk.
3. Small-Cap Companies

Small-cap businesses are more likely to be undervalued due to size and liquidity constraints faced by many professional investors. Our focus on companies with a market cap under €5 billion increases our chances of finding undervalued opportunities.
4. Quality Businesses

Investing in high-quality businesses lowers investment risk, while simultaneously enhancing the potential for substantial long-term returns. Quality businesses are generally less vulnerable to stock market sell-offs.
5. Attractive Prices

Acquiring companies at discounted valuations reduces the risk of loss from valuation declines. Investing in companies with higher earnings yields enhances capital returns for investors.
6. Concentrated Portfolio

Focusing on the best opportunities increases the potential for outsized returns. Our target portfolio of 10-20 companies ensures sufficient diversification to mitigate company-specific risks.