Denali Investors, LLC letter to investors for the fourth quarter 2014.
Also see part I: After 66% Return In 2013, Denali Investors Up 19% In 2014
H. Kevin Byun founded Denali Investors in 2007. The firm employs an opportunistic special situations and value-oriented framework. Denali seeks to identify catalyst driven situations that will unlock value and produce market agnostic returns. Mr. Byun has a triple major from Rice University and an MBA from Columbia Business School.
Denali Investors: Investing Framework
Value + Special Situations (Catalysts): Denali seeks to identify value-oriented and special situation investment opportunities at substantial discounts with definable catalysts or by being the catalyst through proactive methods. Our special situations focus and experience has generated outstanding market agnostic returns.
Fundamental Research + Analysis: Denali’s research and analysis have consistently produced a high rate of success. Our investment process uses a combination of thematic and rigorous fundamental research on individual companies and catalyst driven situations.
Portfolio Construction + Risk Management: Denali invests in only its highest conviction ideas. Concentration into 5 – 15 very attractive, non-market correlated investments is an advantage. Our opportunistic style of investing allows the firm to select investments with highly favorable risk-reward profiles. We structure the portfolio to have favorable asymmetric characteristics that we believe will provide substantial upside yet preserve capital in a downturn.
Flexible & Opportunistic Mandate: Denali has a flexible mandate that allows the firm to look at opportunities across the spectrum. Unlike other funds that are designed to fit into a limited ‘style box,’ we are opportunistic generalists focused on special situations. Our flexible approach has resulted in numerous outstanding investments.
Net Cash = Fortress: Cash is a valuable strategic asset. Our cash has typically averaged 20% to 35%. Cash remains the default in the absence of greater opportunities.