Orione 1 obtained UK autorisation to operate as Private closed-end fund in July 2023. Orione 1 stands as a premier UK equity boutique renowned for its management of a diverse array of active investment strategies. As a proprietor-led enterprise, Orione 1 prides itself on a committed team of fund managers who are deeply engrossed in fundamental stock analysis and multi-cap investment approaches. With a strong emphasis on meticulous research and a strategic investment philosophy, Orione 1 has carved out a niche in the competitive financial landscape by delivering consistent, long-term value to its clients.
Orione Funds
Launched in July 2023, Orione 1 has carved a niche for itself by focusing on smaller companies that demonstrate significant growth potential. Distinct from some of its contemporaries, the fund consciously avoids investment in micro-caps or mid-caps, thereby delineating its market segment with precision. The fund managers adopt a cautious stance by steering clear of high-risk sectors such as oil & gas, biotech, and mining businesses, which are often subject to volatile market forces and unpredictable regulatory environments.
The investment approach is methodical and begins with a rigorous quantitative screening designed to eliminate companies exhibiting aggressive accounting practices or poor corporate governance—factors that can obscure the true financial health of a company. Following this initial culling, the managers employ their proprietary 'P3M' process to evaluate the remaining stocks. This process is meticulous in seeking out companies that not only possess unique products that set them apart from their competitors but also maintain robust sustainable margins, ensuring consistent profitability over time. Furthermore, management alignment with shareholders is paramount, as it often correlates with prudent decision-making and long-term value creation. Companies that meet these criteria make up the core 75% of the portfolio.
The remaining 25% of the portfolio is allocated to value opportunities that include turnaround stories and businesses that are misunderstood by the market at large. These selections are predicated on the belief that they represent latent potential for significant returns. Regular interactions with company leadership and key stakeholders are integral to the investment process, providing the fund managers with deeper insights into company operations, strategic direction, and market positioning.
The 'P3M' process stands as a strategic cornerstone for the fund managers. It encompasses:
Product Differentiation: A relentless pursuit of companies offering unique and distinctive products or services that confer a competitive advantage in their respective markets.
Profitable Margins: A focus on companies that consistently exhibit high sustainable margins, indicative of efficient operations and sound financial management.
People Alignment: A commitment to identifying companies where there is a strong alignment between management's objectives and shareholder interests, fostering an environment conducive to long-term growth and profitability.
This triad—product differentiation, profitable margins, and people alignment—is the bedrock of the 'P3M' process. It underpins their investment philosophy and is instrumental in constructing a robust and well-diversified portfolio.
Investement process and strategy
Private equity is a form of alternative investment that involves buying and managing private companies or taking public companies private. Private equity funds are typically operated by private equity firms, which raise capital from institutional and accredited investors and invest it in various sectors and industries. Private equity funds aim to generate higher returns than public equity markets by improving the performance, efficiency and value of their portfolio companies. Private equity funds usually have a long-term investment horizon of 7 to 10 years, and exit their investments through strategic sales, initial public offerings or secondary market transactions.
ESG Integrated
The Orione 1 fund demostrates a strong commitment to diversification, featuring a portfolio that includes around 7 distinct holdings. The team responsible for managing the fund diligently avoids the smallest and least liquid stocks, ensuring that the fund remains agile and manageable. They also enforce a strict limit on the fund's size to prevent it from becoming too large to effectively control. In addition, the management team is acutely conscious of the risks posed by having too much capital invested in any one company, and they actively work to mitigate such risks.