The SEC filing: "Centaur Capital Partners LP ... has notified the Board that it intends to resign, and the Board, after careful consideration, determined that it was in the best interest of the Fund and its shareholders to appoint DCM as the new investment advisor to the Fund. It is expected that the Interim Advisory Agreement will become effective on or about November 15, 2018. DCM intends to manage the Fund using the current investment objective and strategies."
The story: Centaur Total Return (formerly Tilson Dividend TILDX) is a remarkably good little fund. All-weather, great returns over time, absolute value orientation. It's been managed since inception by Zeke Ashton, who wants to have a fully-invested equity portfolio but who have kept 40-60% in cash since the market became richly valued. It's made 12% annually over the decade because his stock picks perform really well; last year he had a 13.5% return sitting on 50% cash, which means his stocks returned about 27%. We've profiled it several times.
Nonetheless, money has been walking out the door at about a million a month. My rough estimate is that he's seen outflows in, say, 70 of the past 72 months. The fund is down to $25 million, mostly friends and family now, and he can't justify sticking with it.
The Board has decided to keep it open with a new manager. He is Vijay Chopra of DCM Advisors. I know next-to-nothing about him but here's his bio from his Linked In profile:
Global equity portfolio manager managing global, international and emerging market portfolios utilizing a quantitative investment framework. Global equity strategy has an annualized alpha of over 200bp over the last eight years. The investment process combines a disciplined top-down global country-allocation strategy with a bottom-up quantitative stock-selection strategy to provide two complementary sources of alpha. Global macro-economic, valuation, growth and momentum indicators are used within a multi-factor framework to evaluate country attractiveness, and determine risk-managed country allocation.
Doubtless a good guy.
I don't regret most fund liquidations. About 80% of all funds would improve the world by departing it. I'm just mightily irked when we lose pieces of the other 20% because there are so few investors in the market who are aware of the need to have some protection built in to their portfolios that absolute value funds can't even stay afloat.
It is never a good sign for the rest of us when patient, principled value investors give up in despair.
David
