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By Beverly Chandler, Opalesque London:

Good old-fashioned stockpicking is what is producing the returns for US$60m Noster Capital, a London-based long/short equity value fund with a global mandate. Last year saw the fund returning 19.3% and 2011 is looking promising too. Noster’s managing partner, Pedro de Noronha says: “We are a global value fund so we have the ability to find the right undervalued investments around the world, and because we are very patient investors we can afford to invest in companies with extreme durable competitive advantages that are currently un-appreciated by the investor community.”

For de Noronha, it is all in the research. “We look for undervalued securities backed by a very solid free cash flow generation profile, in addition to having a sound balance sheet. We also like companies in which the management teams are significant shareholders and have a large proportion of their net wealth invested in the business. In short, businesses with a track record of above average returns on equity which are managed by a team who has a strong alignment of interest with their shareholders.”

This last can be said of Noster itself. “Noster is the Latin word for ‘our’” explains de Noronha. “It is our capital because over 50% of assets under management belong to the management team. Every investor in Noster invests in the same vehicle that we use to invest our own money and we look for the same in our investments.”

The firm has two full t......................

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