Chuck Akre started to manage mutual fund in 1997, and recently he left FBR Focus Fund and started his own fund - Akre Focus Fund (AKREX) in September 2009. The fund has only four months of history, it is too short to tell for now.
But investors into the fund should feel at peace as Akre carried an outstanding track record with him: his previous fund, FBR Focus, returned about 10% per year on average and carried a 5-star rating from Morningstar, beating the S&P 500 during the time under his management.
GuruFocus data shows that as of September 30, 2009, he manages about $280 million very highly concentrated among 20 stocks. His actual AUM might be more that as we do not count his cash and debt positions. Top five stocks are: American Tower Corp. (AMT, 15.04% of portfolio), Enstar Group Ltd. (ESGR, 13.31%), Markel Corp. (MKL, 12.53%), Penn National Gaming Inc. (PENN, 11.19%), and O'Reilly Automotive Inc. (ORLY, 9.65%).
The stocks are highly concentrated in two sectors: Financials and Consumer Services.
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In selecting his investment ideas, Akre uses a "three-legged stool" approach:
The first leg is examining business models of companies that have a history of generating above-average rates of return. The fund's historical threshold is about 20%, but in the current market environment he'll consider returns in the upper teens.
The second leg of the stool is studying management teams to see if they have a record of acting in the best interest of shareholders.
The final leg, which looks at reinvestment opportunity. He wants a company to be able to reinvest its capital in a way that it allows it to earn unusually high rates of return.
Watch this recent Morningstar interview in which Chuck Akre discussed his investment approach:
The interview will happen on January 27. GuruFocus users can submit their questions by commenting on this post.