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Value Investment
As a value investor, Marathon Capital applies proven investment management strategies
designed to capitalize on undervalued markets and securities. We invest in a range of instruments to achieve long-term
capital appreciation. We focus primarily, but not exclusively, on emerging markets equities complemented by fixed income
securites issued when yields do not reflect the sovereign reality. Marathon offers investors an opportunity to achieve
significant returns and we leverage our expertise to reduce risk. While it may mitigate unfavorable short-term results,
excessive diversification often produces mediocre results over the long term. In order to achieve superior performance,
we focus on effective country allocation and often concentrate investments, commiting resources only when growth and value opportunities
merit. Marathon's principals possess an understanding of global market dynamics honed through years of international
business and investment experience.
Fundamental Sovereign
Analysis
Central to our valuation methodology is the fundamental analysis of each sovereign entity's relevant
economic and political characteristics. To assess the current status of and foresee changes in economic growth, inflation
and credit worthiness, our investment team monitors a spectrum of economic indicators, amongst which are: inflation expectations,
fiscal and monetary policies, nominal and real interest rate levels, GDP growth, and the exposure of the public and private
sectors to offshore liabilities.
Asset Selection
We then explore contrasts in fundamental relative value across markets to weigh the factors influencing risk and
return and to identify target markets, sectors and specific instruments. This review explores such factors as cross
country sector valuations, earnings growth potential, yield curve spreads and currency prospects. While such factors
generally advocate selections based on an intermediate term horizon, our analyses often produce conclusions that warrant short-term
adjustments to the portfolio.
Mispriced Risk
Our investment approach is geared toward identifying countries, securities or currencies whose value has moved out of line
with what is justified by their underlying fundamentals. This approach often leads to exposure in out-of-favor or forgotten
markets and securities. Markets that have lost popular appeal often promise the greatest growth potential. When our research
identifies such an investment opportunity, we look to build positions near historical support levels to serve as a natural
hedge in the event of a market downturn. In this way, our contrarian stance not only provides greater exposure to upside
price action but also may reduce downside risk.
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