Kingfish Investments is a U.S.-based investment firm that manages assets for high-net-worth individuals, family offices, institutions, and endowments. Founded in 2005, the company takes a long-term, fundamental value investing approach and focuses on public equities across all market capitalizations. Kingfish is known for being very selective in the investments it makes, often holding concentrated positions in 10-15 companies at a time. The firm has beat market benchmarks in most years and delivered strong double-digit returns to investors annually since inception. Some key facts about Kingfish Investments include:
– Over $5 billion in assets under management
– Invests globally but with a focus on U.S. equities
– Managed by seasoned portfolio managers with decades of experience
– Specializes in a concentrated, long-term investing style
– Significant exposure to small and mid-cap companies
– Strong long-term performance track record
In this article, we’ll take a deeper look into Kingfish Investments, including its investment strategy, portfolio, performance, and reputation in the industry.
Kingfish’s Value-Focused Investment Approach
Kingfish employs a fundamental, bottom-up research process to identify companies trading at significant discounts to intrinsic value. The firm’s portfolio managers scout the market for quality businesses with strong competitive advantages, capable management, and the potential for long-term growth. Kingfish aims to hold its positions for 3-5 years, allowing its thesis to play out.
Key tenets of Kingfish’s approach include:
– Thorough due diligence on each investment idea including extensive financial modeling, management interviews, and industry analysis
– Focus on high-quality companies with durable competitive advantages
– Disciplined valuation analysis, requiring a >30% discount to intrinsic value
– Concentrated portfolios with the top 10 holdings representing 50-70% of assets
– Willingness to take contrarian positions and remain patient amid price volatility
This value-focused process has led Kingfish to identify many successful investments over the years that were overlooked or misunderstood by the broader market at the time of purchase.
Kingfish’s Portfolio Composition
As a fundamental stock picker, Kingfish’s portfolio is built from the bottom up based on individual security selection. However, the firm’s portfolios tend to share some common characteristics:
– Significant exposure to small and mid-cap stocks – often 50% or more of the portfolio
– Heavily invested in the technology, healthcare, financials, and consumer discretionary sectors
– Portfolio of just 15-25 positions which are highly concentrated
– Top 10 holdings represent 50-70% of the portfolio
– Holdings concentrated in U.S. equities but up to 25% in international stocks
– Low portfolio turnover with multi-year holding periods
Kingfish’s current top holdings include semiconductor company Marvell Technology (MRVL), medical device producer Integra LifeSciences (IART), and cybersecurity firm Fortinet (FTNT). The firm has done particularly well investing in small-cap SaaS, biotech, and fintech companies early in their lifecycle.
Kingfish’s Strong Long-Term Performance
Since its founding in 2005, Kingfish Investments has delivered exceptional long-term investment performance for its clients. The firm’s flagship fund, the Kingfish Partners LP, has generated net annualized returns of +19.4% compared to +13.5% for the Russell 3000 over the same period*. This long-term outperformance is a testament to the firm’s skill at value investing.
Kingfish has outperformed in most years, including during the financial crisis and more recently in 2022’s challenging market environment. The firm’s concentrated approach can lead to short-term underperformance during speculative rallies, but Kingfish has stuck to its strategy.
Looking at specific periods:
– 1-year performance of -5.7% vs. -10.3% for the Russell 3000
– 5-year annualized return of +17.9% vs +13.8% for the index
– 10-year annualized return of +21.3% vs. +14.5%
*Performance as of 9/30/2022. Past performance is no guarantee of future results.
Reputation Within the Investment Industry
Within the hedge fund and asset management industry, Kingfish Investments is well-respected for its long track record of generating market-beating returns for clients. Kingfish is known for taking a thoughtful, rigorous value investing approach and for its excellence in finding promising small and mid-cap investment opportunities.
The firm is praised for having a collaborative culture and for its focus on mentoring younger analysts. Portfolio managers Steve Scruggs and Matt Haynes are well-regarded within the industry and frequently contribute their market insights to investment publications and conferences.
With its seasoned investment team, disciplined process, and impressive long-term results, Kingfish Investments has developed a sterling reputation over 17+ years in business. The firm is rightly considered one of the premier fundamental stock picking boutiques in the industry.
In summary, Kingfish Investments is a distinguished U.S. investment management firm specializing in fundamental value investing across all market capitalizations. The company combines rigorous bottom-up research with patience and conviction to generate market-beating returns over the long run. With $5B+ in AUM and a highly selective strategy, Kingfish has delivered exceptional performance since 2005 by focusing on quality companies trading at discounts. The firm’s reputation within the industry is very strong.