About Us
Overview
Radar is an independent investment company founded in April 2013. Our partners represent a relevant share of our assets under management. We have unique access to companies, controlling groups, regulators, banks and key buy-side players. We engage in constructive activism with companies when we believe we can add value. Our long-term horizon allows us to take advantage of short-term volatility, and our concentrated portfolio allows us to monitor companies closely. Endowments represent a relevant share of our assets under management, which allows us to truly invest for the long term. Our main goal is to compound return for the next 20-30 years via a structured and disciplined bottom-up investment process, based on qualitative and quantitative inputs.
Team
We are an investment company with an experienced team of professionals that has been working together for many years. Our partnership is based on meritocracy, where over 75% of partners’ remuneration is reinvested in our funds. We are transparent with or investment team, our investors and companies in which we invest.
Investment Process
We are disciplined in following our rigorous and original investment process that translates quantitative and qualitative data into objective risk assessments, allowing us to calibrate our exposure to the ideal risk-return asymmetry within our circle of competence. Our process exposes risks that are often overlooked by the market (especially during times of euphoria), such as the potentially explosive combination of financial and operational leverage, impelling us to demand an additional safety margin to support growing risks. After detailed bottom-up analyses and meetings with stakeholders, including the management team of the companies, we generated a final portfolio of 5 to 12 companies, constantly rebalancing and monitoring by investment committees that certify and readjust our theses. We invest in sectors and companies in which we believe we have a competitive advantage and see ourselves as shareholders in the long run.
We invest in undervalued companies that can generate absolute returns, adjusted for risk, above the cost of long-term Brazilian capital. We prefer to search for value in companies with moats, consistency, predictability and sustainability. We prioritize well-managed businesses, with consistent operating history, solid balance sheet, long-term perspective of growing earnings per share and cash flow generation. Our analysis team is independent, often divergent from the market, and always focused on the long term. We do not focus on indexes because we believe they are a misrepresentation of investment opportunities in Brazil. We are not market timers, traders or graphic analysts.
Risk Management
Capital preservation is at the center of our risk management strategy and present in all stages of our investment process. We believe that the main part of the risk of a position is related to the business, not to market volatility. To avoid permanent capital loss, we are disciplined to follow our rigorous investment process which includes deep research and monitoring of companies, sectors and stakeholders. We are willing to keep cash when investment opportunities are scarce. We conduct frequent bottom-up stress tests for all relevant assumptions. Further details on the risk management policy, as well as other compliance policies observed by the company in the exercise of its activities, can be found in the Compliance and Risk Management Manual of Radar.