Established in the year 2000 in London, Centaurus Capital is owned and managed by its employees. They launched the company after having worked together as an investment team at BNP Paribas since 1993. Mr. Bernard Oppetit was the leader of the team and is the founder of the firm, starting the company with an initial capital outlay of $500 million mostly arranged by BNP Paribas.
Mr. Oppetit, now also enjoying the titles of Chairman and Chief Investment Officer, together with his colleagues runs a tightly knit team with intelligence and the savoir faire that he has gained over the years. His intellectual prowess in general was obvious at an early age as he attended the elite Ecole Polytechnique in Paris which only admits about four hundred out of five thousand applicants annually.
A year after graduating, in 1979, Mr. Oppetit joined Paribas and eventually, after eleven years there including a stint in New York as a risk arb trader, was promoted to Global Head of Risk Arbitrage. Until the merger of Paribas with Banque National de Paris in May 2000, Mr. Oppetit served as Global Head of Equity Derivatives and following the merger, he worked as Head of Risk Arbitrage at BNP Paribas in London.
In August 2000, he laid the foundation of Centaurus Capital along with two of his BNP Paribas teammates, Randy Freeman and Massi Khadjenouri. While Ms. Khadjenouri left Centaurus Capital to pursue other ventures (most recently founding her own fund Kite Lake Capital), Mr. Freeman is still with the fund as a Director and also shares the title of Chief Investment Officer with Mr. Oppetit. Prior to meeting Mr. Oppetit at BNP Paribas’ risk arb desk, Mr. Freeman had been an associate with Goldman Sachs in New York and Chicago. Their combined knowledge and experience in risk arbitrage was and is their main investment strength which has carried them quite successfully over the years.
Till today, Centaurus Capital’s primary focus is on risk arbitrage, mainly betting on whether corporate takeovers and mergers will be completed after their announcements. As their flagship fund Alpha mushroomed to a peak of 4.5 billion dollars, in mid 2000s, Centaurus Capital often began to play the role of an activist fund as it steered their portfolio companies in certain directions, often against the management. (Mr. Oppetit, however, “is evangelical” regarding his activist approach, which is often accused of being merely focused on short term gains for the fund, claiming it plays a constructive part in making businesses more accountable to all of their shareholders. And, since his preponderant concern is maximizing shareholder value, it ends up benefiting all concerned parties.) After deep losses in 2008, the Alpha fund made an unsuccessful bid to its shareholders to restructure the fund mandate by lowering fees and returning to a risk arb strategy/event driven strategy with more of a side focus on activism.
While the Alpha fund closed and returned all the monies to its investors, through its other fund vehicles, the management of the company continues to follow an event-driven approach to investment. Basically, it acquires equity and credit securities, mostly from companies that are undergoing corporate changes or are being driven by innovation, i.e. introducing new products and radical solutions. Significant corporate events drive the Centaurus Capital’s investment philosophy: deep value investments. Deep value investments are those investments whose fundamental or intrinsic value is higher and deeper not apparent to the untrained, hence these securities market price does not reflect their true value.
In case a particular event happens, reflecting on promising future prospects of the company which issued these securities; the value of company investments is expected to increase. Centaurus Capital picks up all such securities with promising good payoffs in the future to form the bulk of its investment portfolio, thereby reaping profits through price appreciation and increasing shareholders’ value.
Moreover, Centaurus Capital believes in understanding the businesses it invests in and therefore has a stake in their performance. For this purpose, it maintains an ongoing dialogue with the executives of all the companies which are part of the investment portfolio of Centaurus. These constructive dialogues are meant to gain a deeper understanding of the business in order to be better able to predict its future performance.
Centaurus Capital constructs its asset management portfolio with rigorous research to create unique hedging opportunities. For this purpose, the firm selects stocks by employing bottom-up fundamental analysis and a multi-strategy to invest in equity and credit securities. Its investment portfolio comprises of publicly traded equity securities from Asian, European and emerging markets. Centaurus Capital holds between 200 to 300 positions with 80% of its fund invested in Europe. Together with value securities and credit securities, it constitutes the entirety of its portfolio. It has diversified investments in several asset classes in various jurisdictions across the globe.