Welcome to the Munich Student Managed Investment Fund – the MSMIF!
What is the MSMIF?
The MSMIF is a non-profit organisation entirely structured, managed and administered by students who are also members of the TU Investment Club. In simple terms, the MSMIF is the financial vehicle through which the club operates and is able to apply its collective expertise.
What is the primary goal?
Quite simply, to build expertise in the field of investing. Through a large number of great professionals who have become our sponsors, partners or members of the Advisory Board, we have been able to establish a sustainable, tailor-made investment strategy on which our so-called analyst training is based on and according to whose guidelines the MSMIF operates.
How do you build know-how?
In order to create specialist knowledge in a practical and authentic manner, we regularly conduct workshops, training sessions and other further education opportunities such as lectures or coaching sessions, which ensure that the members of the club, our analysts, learn all the skills they need to conduct high-quality company analysis. This does not take place solely through a transfer of knowledge from our high-calibre partners, but is equally created through the transmission of knowledge from one generation to the next.
What does the MSMIF offer analysts?
We want to encourage leadership. We are convinced that leadership qualities can only be acquired if someone takes responsibility, commits oneself to a cause and stands up for it. Therefore, an analyst or a team of analysts is responsible for the investment hypothesis that he or she has worked out and is fully integrated in the entire investment process.
What is your Investing principle?
We follow the value investing approach, which we believe will deliver sustainable long-term returns. This concept – established by very successful and well-known investors like Benjamin Graham, Warren Buffet and Philip Fisher – focuses primarily on fundamental analysis. We conduct a deep qualitative and quantitative analysis and thereby aim to understand the business of our investment target.
What is the MSMIF’s overall objective?
The objective of the MSMIF is to establish a closer connection between academic theories and the professional investing world, by giving students the opportunity to collect experiences in the fields of Investment Analysis and Portfolio Management. Within the framework of a professional portfolio management students get among others intense training on qualitative and quantitative investment analysis, understanding the market, its psychology, investment strategies, corporate governance and risk management. Qualitative aspects like entrepreneurial thinking, discipline, patience, passion and a long-term sight are imparted alongside fundamental quantitative analysis.
Disclaimer: Nothing on this site is meant as investment advice or trading recommendation. The author might hold securities already prior to any discussion. PLEASE DO YOUR OWN HOMEWORK AND DO NOT TRUST ANYBODY WITH “STOCK TIPS” OR “FREE INVESTMENT ADVICE”.
For our MSMIF Portfolio we decided to strictly follow Value Investing principles with a long-term orientation.
What companies are we looking at?
We focus on small-caps in particular, which has several reasons:
- We do not invest purely for the sake of it, but primarily for educational reasons, which is why we do not invest large amounts and why the impact of our investment can be better interpreted on the basis of smaller companies and we take less liquidity risk.
- In addition, small companies usually have a more trivial business model that is more suitable for educational purposes as it is easier to understand.
- The fundamental assumption of Value Investing is the thesis of overreacting markets, with the consequence of ‘imperfect’ share prices. Markets guided by macro economical and psychological effects lead to overreactions and consequently under- or overvalued stocks. We seek for undervalued companies and gain profits by the increase of the firm value to the level of its fair value and benefit from looking at companies that are not in the everyday spotlight, increasing the likelihood of finding a hidden champion, for example. Due to these facts, overreactions appear more commonly in the Small-Cap market and attractive investment opportunities are more likely to be arise.
- Finally, it also plays a role that smaller companies are easier to contact and it is not unlikely to get into conversation with the management of a company, which would simply not be possible with larger companies.
What does an analysis look like?
Usually, an analysis takes place in a team. 2-3 analysts either select a company from our specially compiled watch list or choose one of their own choice. During the valuation process we focus on our circle of competence, which includes qualitative and quantitative techniques to estimate the fair value of a company in its market environment. Quantitative techniques include the Net Asset Value, Earnings Power Value, Multiples and Discounted Cash flow method. These techniques complement the qualitative due diligence for getting clear insights. The qualitative part of the analysis provides a close view and deep understanding of the company within its market environment and contains techniques like Porters Five Forces, thr Wittek Framework or the SWOT Analysis.
What happens after the analysis is done?
The analyst team presents its analysis to the member base in the form of a pitch at one of the weekly equities meetings. The member base then votes on whether the respective company is attractive, meets the MSMIF guidelines and should be analysed more intensively. If the decision is “yes”, the company is presented to the Investment Committee in a timely manner after the initial pitch and after any questions that may have arisen have been answered. The investment committee is in charge of the final investment decision.
THE PEOPLE BEHIND THE MSMIF
The management of the MSMIF is determined by the Board of the TU Investment Club and is always represented by a dual leadership.
Lucas studies Management and Technology at TUM with a focus on Computer Science and has gained experience in a Family Office focused on Private Equity. He is from Rio de Janeiro, Brazil.
Vincent studies Business Administration at LMU. He gained experience in private banking, wealth management, consulting and M&A.
Khadjavi Capital Partners
Konstantin is the founder of Khadjavi Capital Partners. His responsibilities include managing KCP´s consulting and research activities, global asset allocation strategies, quantitative selection processes and fundamental target evaluations.
Bayerische Vermögen AG
Christian Gruben first worked as portfolio manager at the Bayerische Vermögen AG. Since 2005 he is Asset-Manager and since 2007 general manager of the Bayerische Vermögen Asset Management.
PETER THILO HASLER
Peter Hasler is founder of Sphene Capital and member of the board of the German Association for Financial Analysis and Asset Management (DVFA). He has more than 25 years of experience as financial analyst.
BERND MÜHLFRIEDEL CFA
Bernd Mühlfriedel is currently Professor for business administration at Landshut University of applied sciences and CEO of Augustus consulting. Prior to Augustus Consulting he managed the 12snap AG and was senior consultant at McKinsey & Company.