We look for a minimum of 40% of the sales to be related to the underlying theme and a market capitalization of at least $200 million.

J. Cohen, Founder of RoboCap

Investment Approach

RoboCap individually assesses each company within the investment universe with a focus on their own particular products and technologies, the end market size of that technology and where their competitive threats come from.

RoboCap instigates a rigorous in-depth research process to help us pick the right stocks for the portfolio at the right time. We look for companies with a good underlying exposure to the robotics and automation theme, a strong business model backed by excellent technology, a good management team and all that at a compelling valuation.

 

We Focus On "Pure-Play" Robotics

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Our theme is a vast and growing subject. We currently estimate that there are over 3,700 companies in this field. Naturally, if we look only at listed companies these numbers will go down. Once we add our rules of a minimum $200 million Market Capital and over 40% of the sales in the theme on a 2 to 3 years vision, we reduce that number to around 200. While it might seem a very limited basket, it has grown by 13% in 1 year. At the same time, we see companies being bought by some of the giants that Google and Amazons have become. It is at the same time growing, and changing fast. This is the reason why it needs the full attention of a team who are specialized on this theme.

In the end, we are selecting around 30 different stocks to compose our portfolio.

 

Bottom-up Investment

We are very careful with our investments and the size of the Universe gives us the opportunity to really look at each company. We do the usual research in Bloomberg and look at all the news from the company. Where we separate our selves from a generic fund, is that we usually meet with the management or the executives of the company. This allows us to have a full vision of the technology, where they are and where they want to go.

We then look at it with our advisory board to really understand the technology. The concepts are so advanced, it is impossible for someone with a financial background to truly understand it. You need someone with an engineering background to really see the limits of the products.

We also try to educate ourselves on various subjects. We are encouraged to follow courses, to learn how to code or in engineering with Coursera or at Imperial College.

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Risk Management

Risk
Potential Mitigation
Technology
Access to leading experts via the Advisory Board. Specialization in this theme across sectors
Equity
Can be mitigated with derivatives (futures, options)
FX risk
We hedge all our FX risk per UCITS requirements
Correlation
Sub-themes are not correlated
Legislation
Still a hurdle but moving forward at variable speeds depending on countries
Fraud
Market is largely dominated by developed markets with reliable accounting standards
Liquidity
No companies below $200mm market cap and UCITS rules have to be applied
Country
Diversified across the US, Europe, Japan, Israel, Taiwan, South Korea and China
Economic sensitivity
The theme is secular and not correlated with the economic cycle
Balance sheet
Companies tend to have a very low level of leverage
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Our Geographical Exposure