Active Owners Fund (28% in '13, +7% YTD) prefers small cap market

Benedicte Gravrand, Opalesque Geneva Ben Terk

The Active Owners Fund (AOF) is a deep value, event driven, long/short fund investing in North American small cap opportunities. The fund was launched in January 2011 and returned -4.9% that year, 24% in 2012, 28.5% in 2013, and it is up 6.9% YTD (to end February). One of the portfolio managers talks to Opalesque about the fund strategy and opportunities in the small cap market.

The founders and portfolio managers of the AOF, at AOF Management LLC, which has offices in Los Angeles and New York, are Joe Pretlow, who has invested in small caps for 20 years and who previously ran JPC, a private equity investment firm, and Ben Terk, who was a partner at Rho Capital for 10 years, where he led numerous minority investments and played an active role on several boards. They set up the firm in November 2009.

"First and foremost, we are small cap deep value investors seeking event driven opportunities," Ben Terk tells Opalesque during a recent interview. "However, once we develop sufficient conviction around our portfolio companies, we will regularly seek to raise the institutional profile of our companies with other like-minded public or private investors. As result, we have had a number of our portfolio companies taken private."

The two portfolio managers have a private equity background and many of their LPs are GPs of prominent private equity funds, he adds.

The fund invests in buy-out quality companies that are frontrunners in niche markets with good market power, that are trading at deep discount to intrinsic value, and that are either in transition and/or open to a transaction, Terk explains...

"On the front end of our process, that means i......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.