Ansgar John Brenninkmeijer, the fifth-generation descendant of the Dutch C&A family, read a popular investment book, founded a fund without any prior experience, had it blessed by a daytrading priest, and has been outperforming “virtually all indices” since.
The google search for Ansgar John Brenninkmeijer yields remarkable results. At a young age, he received treatment in a psychiatric institution. He was arrested twice for resisting COVID-19 measures, and he spent a short time in a police cell.
Brenninkmeijer remains unfazed. According to him, the media’s portrayal of him as ‘recalcitrant’ and ‘extroverted’ doesn’t align with his true character. In an interview with Investment Officer, he shares, “I sometimes push myself to be extroverted, but I’m actually an introverted person who loves reading. I’m just an investor.”
ValueMachinesFund
Completely unfamiliar with the financial industry, Brenninkmeijer read Benjamin Graham’s book “The Intelligent Investor” in 2012 and decided to start an investment fund based on Graham’s principles despite his lack of experience.
After asking around his network for someone knowledgeable about Graham’s method, he met his current partners Hendrik Oude Nijhuis and Björn Kijl. Together, they founded the ValueMachinesFund in June 2018, which has been managed from an attic room in the village of Losser in the Dutch province of Overijssel.
To cut costs, they decided to invest outside the supervision of the Authority for Financial Markets (AFM), but they are currently preparing an application for a license.
A Blessed Fund
Brenninkmeijer says that he had the fund blessed by a priest friend with investment experience, with the approval of his partners. He explains that this used to happen when opening a new C&A store as well. “Since then, we’ve been leading a blessed existence,” says the fund manager.
According to him, this move has paid off. The fund, with 50 million euros under management, has an average net return of 13.3 percent per year since its inception. Initially priced at 100 euros per share, it has now risen to 191 euros, its highest value ever.
Brenninkmeijer estimates the intrinsic value of individual shares to be 327 euros. “That’s a ‘margin of safety’, or a discount of 42 percent,” he says, quoting Graham.
The fund’s more than 150 participants are mostly entrepreneurs, frequently active in the agricultural sector, according to Brenninkmeijer. “Farmers and growers usually don’t need complex models, but a clear story.”
Following the method of Benjamin Graham and his student Warren Buffett, Brenninkmeijer and his colleagues globally search for companies with structural profit growth, economies of scale, and a relatively high return on invested capital. The strategy revolves around reacting to market movements rather than predicting them.
“If prices rise, we take profits; if they fall, we buy. In a steady decline, we’ll keep buying until hell freezes over”, he explains.
The strategy doesn’t get much more complicated. As long as companies are consistently profitable and their stock price is below the ‘estimated business-economic’ value, they’re attractive to Brenninkmeijer. He makes an exception for China and banks.
“We don’t want to invest more than 20 percent of the fund in China because there’s a risk that the government will eventually nationalize companies. As for banks, we don’t really understand them, so we follow Warren Buffett’s advice: don’t invest in companies you don’t understand,” says Brenninkmeijer.
The fund holds between 15 and 50 stocks. The largest position in the portfolio is currently the American company Elevance Health. “The profits of American healthcare companies flow to capitalists, including those in the Netherlands,” Brenninkmeijer immediately adds. “That’s incredibly unfair, but we benefit greatly from it.”
As Manic as the Market
“It’s known that I’m manic-depressive,” Brenninkmeijer casually mentions. When asked about the implications for the fund’s investment policy, he responds matter-of-factly, “I’m a bit too impulsive to make investment decisions myself; my partners handle that.”
“Because I’m bipolar, I constantly have to ask myself: am I crazy, or is the world crazy?” Brenninkmeijer explains. “The whims that my own character is subject to, I recognize in the capital market. I know how to deal with the euphoric market sentiment one day and plummeting prices the next.”