Summers Value Partners is a Denver, Colorado-based, boutique value manager launched by a Chartered Financial Analyst, Andrew Summers, last year. The firm serves as General Partner for the Summers Value Fund LP, a fund that primarily invests in stocks from the healthcare-related industries (including consumer health and animal health). Andrew Summers cut his teeth at INVESCO Funds Group where he was a Co-Portfolio Manager of a healthcare hedge fund. He earned his Bachelor’s degree in Business Administration from the University of Wisconsin-Whitewater and a Master’s degree in Finance from the University of Wisconsin-Madison. In its recently released Q1 2019 Investor Letter, the fund disclosed a net return of .11% for the quarter compared to the S&P 500 return of 13.1% and the Russel 2000 Index return of 14.2% for the same three months. If you are interested you can download a copy of a complete letter below. We bring you only a small part of it here:
The Summers Value Fund LP (“the Fund”)generated a net 1 return of .11%during the first quarter of 2019, which lagged the S&P 500Index return of 13.1%and the Russell 2000 Index return of 14.2%. The first quarter of 2019 was the best first quarter performance for the major indexes since the first quarter of 1998. For the month of March, the Fund returned -5.8% net 1 versus the S&P 500 Index return of 1.8% and the Russell 2000 Index return of -2.3%. Our performance during the month was negatively affected by a 22% sell-off in the shares of Scott’s Liquid Gold (SLGD), the Fund’s largest position, following the release of weak fourth-quarter results. The underperformance in March has left the Fund lagging the major indexes on a year-to-date basis. Since inception(10 months), the Fund has returned 3.8% net1,which is in line with the S&P 500 Index return of 3.6% but compares favorably to the Russell 2000 Index return of -6.6%. We believe the Fund remains well-positioned to generate attractive risk-adjusted returns over the long term driven by the compressed values and special situations that we hold in the portfolio today.
As we have emphasized since launch, the Fund is not managed to look like the major indexes and could deviate materially (positively or negatively) in any given period, including years. At the core of our investment philosophy, we believe that a concentrated portfolio of stocks will provide us with the best opportunity to outperform the major indexes over the long term. However, a concentrated strategy is typically more volatile than a diversified basket of stocks—or an index —and investors should be prepared to ride out periods of underperformance. We recommend that our limited partners focus on annual(or longer)periods of performance instead of monthly returns. The Fund’s three and five-year lock-up periods are designed to encourage such behavior.
You can download a copy of Summers Value Partners’ Q1 Investor Letter here: