Value Investing Live Recap: Azvalor Managers and Mittleman Investment Management

Key questions and takeaways

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May 12, 2021
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GuruFocus had the pleasure of hosting a presentation with Azvalor Managers and Mittleman Investment Management.

Azvalor Asset Management

Azvalor AM is an independent employee-owned investment management firm with offices in Madrid and London. Founding partners Alvaro Guzman and Fernando Bernad delivered top decile long-term returns at their previous firm Bestinver, prior to founding Azvalor in 2015. Their long-term valuation-oriented investment portfolio is focused on bottom-up stock picking, implemented through extensive proprietary company research in out-of-favor segments of the global equity market. Guzman and Bernad were recently featured in Ronald Chan's book "The Value Investors: Lessons from the World's Top Fund Managers."

Javier Saenz de Cenzano, CFA

Javier Saenz de Cenzano has more than 20 years of experience in manager selection at firms like Russell Investments and Morningstar. He joined Azvalor in 2018 to lead Azvalor Managers, a fund that partners with four out of the radar boutique-type managers selected through an in-depth and purely qualitative process.

Chris Mittleman - Mittleman Investment Management LLC

Chris Mittleman serves as the chief investment officer for Mittleman Investment Management LLC and directs investment policy, research and portfolio management for the firm. He is also the chief investment officer of Aimia Inc. (TSX: AIM) and serves on the company's board of directors. Aimia Inc. is the parent company of Aimia AM Holdings Inc., which owns Mittleman Investment Management, LLC.

Mittleman has provided investment strategy and portfolio management for more than 30 years to clients, including high-net-worth individuals, corporate pension plans, foundations and endowments and other institutional investors. He managed private client portfolios for Spencer Clarke LLC as senior vice president of Investments from 2002 until 2005, when he co-founded Mittleman Investment Management LLC with his brother, Phil Mittleman. Prior to that, he was an investment executive at UBS (PaineWebber) for 12 years. He began his career in 1990 at Shearson Lehman Hutton, after attending Phillips Exeter Academy and The Pennsylvania State University.

Watch the full presentation here:

Key takeaways

Saenz de Cenzano started off the two-part presentation with a short description of Azvalor Asset Management. He explained that the firm operates independently and co-invests in its own funds. Alongside their investors, the team takes a long-term approach to generating capital through their investments.

The firm has offices in both Madrid and London and manages approximately $1.5 billion, but has publicly committed to a maximum of $2.5 billion under management in their core investment strategies. The firm operates with a single investment team and utilizes fundamental analysis with a strong focus on valuation to invest. There are two main strategies employed by the firm, with one being focused internationally and the other focusing on Portugal and Spain.

Azvalor also employs another strategy called Azvalor Managers, which is led by Saenz de Cenzano. The strategy delegates investments to investment boutiques based upon specializations. This allows the strategy to find the best investment opportunities around the world. The current team consists of four different managers that have well-established track records in the industry that all operate on the same values as Azvalor. The presentation then transitioned to Mittleman with questions led by Saenz de Cenzano.

Mittleman started off by explaining how he first began as a stock broker, but described himself as a bad stock broker. He continued to explain that he found an interest in the analytical side of investing, which led him to try to figure out who was a successful investor and how he could follow in their footsteps. Through a deep investment into research, Mittleman came to the realization that value investing is one of the most persistent strategies someone could employ as far as its consistency in outperforming the market.

Through decades of experience, Mittleman has developed his own strategy that he explained has led him to find unique opportunities compared to his peers. He also finds himself turning toward historical records that can shed light on different situations. For example, he turned to the 1918 flu pandemic to help inform him of how the market might react and return to a norm during the current ongoing pandemic.

Overall, he finds himself sticking to a more traditional deep-value approach to investing, where he only buys into companies that are trading at a significant discount to their value. Mittleman explained that the traditional strategy suits his temperament and allows him to feel as if he is sticking within his margins of safety. Thanks to this disciplined approach, he has found strong returns in times that many other managers have struggled.


Mittleman used a recent new buy within his strategy to highlight a unique opportunity that he has found in the international market. The company he chose to discuss was AMA Group Ltd. (

ASX:AMA, Financial), an Australian company that operates in wholesale vehicle repairs. He explained that he had kept his eye on the company for several years and the stock price has gone down since his initial buy. The main reason for this comes from difficulties the company has faced with its leadership. The CEO and several other top executives were let go after a scandal arose of overcompensation through unapproved expenses. Despite the company's struggles, it has a large market share and generates the majority of its capital through consistent insurance claims which Mittleman believes will continue into the future.



Saenz de Cenzano took several questions about Azvalor in the interim between the two sections of the presentation. One that stood out asked him to explain how the firm manages risk within their different strategies.

Saenz de Cenzano explained that the firm does not consider volatility as a good measure of risk. Instead, the firm does its due diligence to understand their investments and managers inside and out in an attempt to expose any potential risks they may be exposed to. This has led the firm to believe there are aspects of the market that are extremely expensive and do not offer very many good investments.

Thanks to their industry agnostic approach, the firm is able to explore opportunities anywhere they see fit. This allows them to exploit industries that are offering up great value opportunities across areas that might not be the "most comfortable" to invest in and to be flexible with focusing their investments.

Transitioning back to Mittleman, the audience member posed a question regarding how he determines when a deeply undervalued asset will turn around in the eyes of the market. Mittleman started off his explanation by emphasizing that he believes trying to determine the timing of these assets returning to favor is the most futile thing he could spend his time on.

He explained he hopes and believes that he is buying these companies at a time of maximum pessimism. The expectation in these scenarios is that an extremely undervalued company will not remain at that place for a long time and that soon it will return to a normal valuation. Mittleman continued to say that he believes extreme deviations from the norm do not tend to last a long time unless a new normal has been established.

Disclosure: Author owns no stocks mentioned.

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