Godafoss Capital Management, LLC (“Godafoss”) looks for well-established public companies that have undergone hardships or mismanagement but are showing encouraging signs to change for the better via technology-related improvements. Management’s strategic initiatives towards applying the right methodologies and technologies play a significant role in evaluating a company’s long-term growth perspective, while driving operational efficiencies along with it. Godafoss considers such opportunities for a long-time horizon that benefits from tax-efficient investments. Adam Veres, the founder and Chief Investment Officer of Godafoss, focuses on information technology and proprietary portfolio management, outperforming the market at large.
Adam Veres, can you tell us why you started this company?
I’m an avid believer in value investing. Coming from an engineering background, I have seen unique ways these fields can complement each other. Value investing looks for great companies selling at discount prices to their intrinsic value, while technology plays a vital role in our everyday life and shapes our future to accomplish more. Just a few months ago, California state Governor Newsom announced phasing out gasoline-powered cars by 2035 in his state. While we may not all be driving fuel-less at that time, we may be thinking more in terms of the utility of electric vehicles and reduced carbon emissions.
Tell us about your journey from a software engineer to investment manager.
I grew up writing computer code and learning different technologies early on, which is what led to launching a career in that field. Throughout the contracting years in software engineering, I became fascinated by the world of finance, especially the value concepts taught by Warren Buffett and Benjamin Graham. Security analysis became second nature to engineering, and it was time to move onto managing outside assets.
What major struggles did you face in getting Godafoss off the ground?
Choosing the right service providers to work with. Godafoss places a huge emphasis on minimizing fees for our investors—after having no management fees, how can we minimize the fund’s operating expenses without sacrificing quality of service? To date, there’s this consideration of investor utility when evaluating inclusion of new services. Because at the end of the day, if it doesn’t serve the benefit of our investors, why pay for it?
Why should investors choose you over your competition?
Index funds offer excellent choices for the average investor looking to diversify in the market or certain segments of it. We believe investing in specialized situations allows investors to capture greater than market-average returns while maintaining similar tax-efficient benefits.
Are there any future expansion plans? If so, what are they?
We’re constantly on the lookout for foreign opportunities. Most quality deals in the US are fairly expensive, although there are few that still provide compelling arguments for investment consideration. The challenge with foreign counterparts is that there’s less transparency over their financials, which makes them more susceptible to accounting trickeries. Nonetheless, businesses in certain developed countries within Asia are worth looking into and paying attention to.
The investment strategy of Godafoss and the targeted characteristics of its strategies and investments is based on current portfolio and expectations and should not be considered definitive. An investment in any strategy, including the strategy described herein, involves a high degree of risk. Past performance of these strategies is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk, including the loss of principal.