Value veteran ditches fund management and tackles distorted markets

Veteran value investor Tom Stubbe Olsen will stop managing public investment funds after more than 30 years in the industry, Citywire Selector has learned.

Stubbe Olsen (pictured), fund manager and founder of Swiss boutique Mensarius, will no longer run the Mensarius Sustainable Value fund, launched last year.

Its co-manager, Cédric Jacques, left the firm in May this year to join Zurich-based Emerald Wealth Partners as senior portfolio manager.

Listing the reasons for his decision, Stubbe Olsen said the short-term business mentality of the markets and the media today contributed to his decision to quit.

“The idea that when you buy a stock you own a business that produces real goods and services, employs real people, and serves real customers is sadly lost on most people,” he wrote.

“The dominance of dumb index funds, black box trading algorithms, and lately social media trading platforms creating sometimes extreme volatility, is a threat to the fundamental investor, who may be unable to sustain their business. as long as markets can remain irrational.”

Stubbe Olsen also spoke about the unintended consequences of regulations introduced after the global financial crisis.

“Price formation is no longer based on logical decision-making, and politicians, central banks and regulators are increasingly managing the economy and financial markets as well as financial players,” he said. he declared.

He added that increased regulation and compliance has led to less information being available, as companies run an increased risk of being wrong or being exposed in social media and the press regarding both profit forecasts and politically incorrect business activities or decisions.

Stubbe Olsen said all market participants now face the heightened challenges of higher debt levels, central banks ill-equipped to handle future crises, distorted risk perception between asset groups and high valuations of virtually all financial assets in the years to come. .

“Today it is nearly impossible to balance these challenges with the benefit of a fundamental, long-term investment horizon in a public fund,” he said.

For these reasons, Stubbe Olsen decided to turn Mensarius into a family office and focus his energy on managing his own money and a small number of discretionary advisory accounts for clients with a fundamental long-term view.

He and Cédric Jacque managed the value-focused Nordea 1 – European Value fund, which merged into the Nordea 1 – European Stars Equity fund in October 2020.

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