Capitalizing on Turn-Around Opportunities in Micro-Cap Stocks
NASDAQ: TURN
Micro-Cap
Expertise
Seeking to Unlock Hidden Value to Generate Attractive Risk-Adjusted Returns
A High-Conviction, Concentrated
Portfolio
Constructive
Activist
Approach
Micro-Cap Expertise
We focus on publicly traded micro-cap companies (<$500 million market capitalization) and invest where our research suggests:
- A company is deeply undervalued relative to our estimated worth
- We can identify catalysts/changes that we believe can unlock value
-
We can add value through constructive activism
- We can invest at valuations that provide a margin of safety
- We can generate attractive risk-adjusted returns in 1-3 years
“A portfolio of strong business and franchises, purchased at the right price, outperforms over a market cycle.”
– Kevin Rendino,
Portfolio Manager & CEO
“Few investors are willing/able to spend the time and energy identifying, conducting due diligence on, and actively engaging with microcap companies to unlock intrinsic value.”
– Daniel B. Wolfe
Portfolio Manager & President
Seeking to Unlock Hidden Value to Generate Attractive Risk-Adjusted Returns
The price we pay relative to the business we buy is the most important driver of investment returns.
Out-of-favor companies and industries create opportunities to identify investments that offer asymmetric return-to-risk potential.
Companies with strong franchises, managements, and balance sheets are the best positioned to turnaround, gain market share, and improve profitability.
A High-Conviction, Concentrated Portfolio
180’s focus is on building meaningful positions in a small number of portfolio companies.
We do not have any specific industry focus, but often find value in industries that have cyclical characteristics.
“We want to capitalize by identifying undiscovered investment opportunities in microcap companies which often have little to no analyst coverage.”
– Rob Bigelow,
V.P., Fund Development
“Our constructive activist approach can lead to a reversal in direction for the share prices of these investee companies… i.e., a 180-degree turn.”
– Kevin Rendino,
Portfolio Manager & CEO
Constructive Activist Approach
- Prioritize revenue growth over operating profits
- Favor the status quo rather than change
- Lack an understanding of ”buy side” investors and the public markets in general
- Expend capital resources on perceived long-term opportunities at the expense of near-term results
- Do not appreciate the impact of flawed capital structures on shareholder value
- Entrench themselves to protect their jobs and positions
An Experienced Management Team
PORTFOLIO
MANAGERS AND INVESTMENT TEAM
Kevin M. Rendino
Portfolio Manager & CEO
30+ Years Investment Management Experience
5+ Years Public Company Board and Operating Experience
Joined 180 in 2016 after serving as the Value Fund leader at BlackRock
B.S. Boston College
Daniel B. Wolfe
Portfolio Manager & President
15+ Years Investment Management
15+ Years Public Company Operating Experience
Joined 180 in 2004 and led alternative investments at 180’s predecessor company
B.A. Rice University
A.M. and Ph.D. Harvard University
CLIENT RELATIONS
AND FUNDRAISING
Robert E. Bigelow
V.P., Fund Development
Joined 180 in 2017 after investment management and capital raising at Blue River Asset Management
B.A. Yale University
A Track Record of Constructive Activism
CATALYSTS TO IMPROVE
SHAREHOLDER VALUE
EXAMPLE
INVESTMENTS
Investor Relations / Messaging Improvements
Suggested improvements to presentations and transparency of financials, including segment reporting; facilitated introductions to analysts, potential new investors and investor relations firms; encouraged increase in non-deal roadshows and conference presentations.
Business / Corporate Governance / Financial Performance Improvements
Recommended various potential paths to improving financial performance and shareholder value via engagements with boards and managements.
Capital Structure Solutions
Developed structure and provided financing that resulted in simplified capital structures and expanded flexibility for business operations and exploration of strategic alternatives.
Board Representation
Elected to a board upon request following constructive engagement that began as a large shareholder.
Strategic Alternatives
Actively discussed need to sell entity or portions of the entity with management and board members. For TST, chaired strategic alternatives committee of the board that completed sales of company in multiple transactions.
Buybacks/Distributions
Significant buyback initiated after suggestion to board; large distribution of proceeds to shareholders after sale of business units.
Investing with 180 Degree Capital
Kevin M. Rendino
PORTFOLIO MANAGER
Chairman and Chief Executive Officer
Mr. Rendino has served as Chairman, Chief Executive Officer and Portfolio Manager of the Company since March 2017. He has served as a member of the Company’s Board since June 2016. Mr. Rendino is a financial services leader with three decades of Wall Street experience in capital markets, value investing and global equity markets. For over twenty years, Mr. Rendino worked on one fund, Basic Value Fund, with a consistent Graham and Dodd focus, at the same firm, BlackRock/Merrill Lynch. He was the value team leader, overseeing 11 funds and $13 billion in assets, a member of BlackRock’s Leadership Committee and a frequent contributor to CNBC, Bloomberg TV, Fox Business, The New York Times and The Wall Street Journal. For the entirety of his money management career, Mr. Rendino ranked in top quartile and beat competitor average and SPX by over 100 basis points. He received numerous Lipper awards for Investment Excellence during his tenure. Since December 2023, Mr. Rendino has served as a member of the Board of Directors of Synchronoss Technologies, Inc., a portfolio company in which we have an investment. From March 2019 to April 2021, Mr. Rendino served as a member of the Board of Directors of Synacor, Inc., a portfolio company in which we had an investment. From November 2017 to August 2019, Mr. Rendino served as a member of the Board of Directors of TheStreet, Inc., a portfolio company in which we had an investment. Mr. Rendino graduated from the Carroll School of Management at Boston College (B.S.).
Daniel B. Wolfe
PORTFOLIO MANAGER
President, Chief Financial Officer & Chief Compliance Officer
Mr. Wolfe has served as President of the Company since January 2009, as Chief Financial Officer and Chief Compliance Officer since July 2016, and as Portfolio Manager and a member of Company’s Board since March 2017. He served in varying other positions within 180’s predecessor company, Harris & Harris Group, Inc., since 2004. Mr. Wolfe led efforts to build an alternative investment platform within 180’s predecessor company, including PIPEs, publicly traded securities and debt. He has served as a member of the Board of Directors of multiple privately held and publicly traded companies. From September 2021 to December 2023, Mr. Wolfe served on the board of Parabellum Acquisition Corp., a blank check company sponsored by a company in which we had an investment. Prior to joining Harris & Harris Group, he served as a consultant to Nanosys, Inc., CW Group and to Bioscale, Inc. while completing his graduate studies at Harvard University. He graduated from Rice University (B.A.), where his honors included the Zevi and Bertha Salsburg Memorial Award in Chemistry and the Presidential Honor Roll, and from Harvard University (A.M., Ph.D., Chemistry), where he was a NSF Predoctoral Fellow.
Robert E Bigelow
Vice President, Head of Fund Development
Mr. Bigelow joined 180 in October 2017 as Vice President, Head of Fund Development. Prior to joining 180, he founded and was Managing Partner of Blue River Asset Management, which ran a series of municipal bond hedge funds dating back to 1999. In that capacity, he was the architect of the trading strategy while also raising most of the capital in his role as the primary marketer. Prior to Blue River, Mr. Bigelow spent 8 years on Wall Street working in municipal derivatives at various firms including Credit Suisse First Boston and Bear Stearns where he was a Managing Director. Mr Bigelow graduated from Yale University in 1990.
Matthew T. Epstein, CFA
SENIOR ANALYST
Mr. Epstein has served as Senior Analyst at 180 Degree Capital since August 2022. From 2018 to 2022 he served as Assistant Portfolio Manager, and from 2014 to 2018, as Senior Research Analyst, at Evermore Global Advisors, LLC, a boutique asset manager focused on special situations investing across global equity markets. From 2005 to 2014 Mr. Epstein held roles of increasing seniority at W.R. Huff Asset Management, where he helped steer investments across various asset classes, including public equity, private equity, high yield bonds, and leveraged loans. Previously he has served as a member of the Board of Directors of Lamington Road DAC and Emergent Capital, Inc. Mr. Epstein holds an MBA from Columbia University (2011) and Bachelor’s of Science in both Finance and International Business from New York University (2005). Mr. Epstein is a CFA Charterholder and a member of the CFA Society of New York.
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