Ben Claremon

Value investor. Private equity firm partner. Host of the Compounders Podcast. No investment advice.

[Ben Claremon @BenClaremon]

Ok, microcap-focused fintwit, I need your help. Today, I released the strategy piece for the microcap opportunities fund my partner and I are working on. The strategy will allow us to take big stakes in microcap companies, via PIPEs for high return growth investments or through buying shares from selling shareholders, CEOs and founders. We will also have the mandate to execute take-privates in the right circumstances.

To make it really successful, we need to form win-win relationships with the sophisticated and thoughtful microcap investors in the space. We recognize that stealing companies from public investors is a way to be short-term greedy as opposed to being long-term greedy. As such, it would be great to establish relationships with as many of you as possible. We aim to be liquidity and capital providers in a space where both are severely lacking. We also have a flexible structure that allows us to partner with existing shareholders in these companies to help catalyze growth and value realization.

If you are interested in learning more, please check out the (lengthy) piece below and/or reach out via DM. Also, please let me know who else in the microcap space I should be following!

@DeepSailCapital @iancassel @alexbossert @ragnarisapirate @PerrittCap @CollinMcbirney @majgeoinvesting @OtterMarket @svafier @PaulAndreola @alluvialcapital @FocusedCompound @BobbyKKraft @LuisVSanchez777 @SmallCapVal @Greenbackd @StockJabber @AKWilk @verdadcap @eriksen_tim

https://t.co/TjcQheKEBj

[Raleigh Partners @RaleighPartners]

FinTwit loves concentrated quality. But somehow is sleeping on this interview. Only 4 likes here and 689 views on YouTube.

[Ben Claremon @BenClaremon]

It has been a while since I sat down to update my thoughts on Devonshire's microcap/nanocap investment strategy. But we have been busy to say the least. In my latest Substack post, I discuss the requirement for us to see a major unlock that comes from our investment before we are willing to spend the time and money to pursue a deal. But what does that look like and what are some examples?

Please see the new article here: https://t.co/R9RyHf1D3w

[Ben Claremon @BenClaremon]

X friends, Devonshire Partners is in the market for an intern who can help us this spring. Our past interns have set such a high bar that it is hard to find candidates who can live up to their work ethic and resourcefulness. However, my partner and I would love to find someone who is interested in getting his or her foot in the door in private equity and wants to get real life deal sourcing experience.

Please see the description below and feel free to share it with anyone who might be a good fit.

Resumes can be sent to me at [email protected].

Thanks for the help!

[Alpha Ark by Sophon @AlphaArkInvest]

Great podcast with the CEO of $SKYH
Much recommended to anyone interested in the company!

We issued a write-up on $SKYH at the end of 2024 saying this is the idea with one of the widest moats we have ever seen and at a steep discount.

Since then the stock has dropped further despite growing income, shorter building times, declining capital cost, and allegedly clients like Elon Musk moving to $SKYH

Moreover, we have a big Q1 catalyst coming: 3 new hangar campuses — ADS I, APA I, and DVT I — are expected to be operational by the end of the quarter. We expect they will generate a net operating income (NOI) of $40-50 per square foot.

With these additions, $SKYH will have eight operational locations, including the recently acquired CMA, and will be more than halfway toward its near-term goal of building 14 locations.

You can read our analysis here: https://t.co/x4eaDoOWOU

[Alex Bossert @alexbossert]

Fantastic interview with Tal Keinan, CEO of Sky Harbour Group $SKYH

[Ben Claremon @BenClaremon]

[New Compounders Podcast] Our guest on the show this week was Tal Keinan, the CEO of Sky Harbor Group ($SKYH), a publicly traded developer and operator of airplane hangars. Before conducting the interview, I had the opportunity to learn a lot about Sky Harbor from an investor friend who owns the stock and knows the company as well as just about anyone on the planet. That led to a deep, rich conversation where we covered:

• The process by which Sky Harbor became public;
• Whether Sky Harbor is a real estate company, an operating company—or both;
• An overview of the supply and demand dynamics for business aircraft hangar space;
• How Sky Harbor views the threat of emerging competition; and
• The economics and returns associated with developing new hangars.

Please enjoy this compelling conversation here: https://t.co/9FW4yXJSAp

Thanks again to @alexbossert!

[Ben Claremon @BenClaremon]

Thanks to my relationship with my podcast partner in crime, @BobbyKKraft, I had the opportunity to contribute to the latest issue of the Planet Microcap Review. In the lengthy (yes, I am verbose) Q&A session, I discussed a few topics that I know are front and center in the minds of a lot of microcap and nanocap investors in the US and Canada. I also highlighted Devonshire's approach to investing against a backdrop where many small public have essentially been left for dead by the institutional investment community. Specifically, we covered:

-Why PE firms are starting to focus more on microcap and nanocap companies, as evidenced by the number of take privates happening in Canada;
-The reasons why there is a structural lack of growth capital available to small public companies in the US and Canada;
-The genesis and evolution of Devonshire Partners’ approach to investing in the microcap space; and
-Why any of the above could be interesting to potential investors.

As always, I am interested to hear people's feedback on the approach my partner and I are employing within the public markets.

You can find my section of the issue here: https://t.co/SkgsTPMbqF

[Ben Claremon @BenClaremon]

[Compounders Podcast Clip] Back in 2017, @ToddWenning, the founder of KNA Capital, created an insightful diagram that contains the concentric circles of management, moat, and price that describes how he evaluates companies. In this clip, Todd describes how he came up with the framework and how he assesses situations where one of the key pillars is missing.

You can find the full episode here: https://t.co/2iuk1GlkQT

[Ben Claremon @BenClaremon]

This was a fun episode. Todd is such a thoughtful educator, investor and writer.

[KNA Capital @knacapital]

KNA Capital CIO @toddwenning recently appeared on the Compounders podcast with @BenClaremon. They covered the importance of moats in Todd's investment philosophy, what's behind the name "KNA", and much more. https://t.co/yClcKhLx7f

[Ben Claremon @BenClaremon]

[New Compounders Podcast] We are back to start a very busy year for the Compounders Podcast with a great interview with @ToddWenning, the President and CIO of KNA Capital. Many of our listeners might have come across Todd’s excellent discussions of moats during his time at Morningstar and Ensemble Capital—or on his Substack Flyover Stocks. Todd founded KNA Capital in early 2024 and I was eager to speak with Todd about:

·        What pushed him to start his own firm;
·        Why economic moats are so important to him and his process;
·        How he decided on the right level of concentration;
·        What he finds so valuable about the process of teaching undergrads; and
·        Why nostalgia can be a very attractive theme to invest behind.

Please enjoy the episode here: https://t.co/2iuk1GlkQT

[Ben Claremon @BenClaremon]

If you are wondering, I do pay people a lot of money to say nice things about me. 👇

In all seriousness, this is a really important role for Devonshire and for the right person, there is a meaningful growth opportunity.

Please feel free to reach out if you are interested or know someone who might be a good fit.

[Adam Wilk @AKWilk]

This is a really cool role for the right person. Ben is a great guy.

[Ben Claremon @BenClaremon]

What he said 👇

[Stocks & Stones | Mathieu Martin @Stocks_Stones]

If anybody is looking for an internship, this is a great opportunity! 👇 Ben is an awesome guy to learn from!

[Ben Claremon @BenClaremon]

Devonshire Partners Industry Research Intern

During this short holiday week, I want to give special thanks to the wonderful interns who have worked with Devonshire Partners over the last year. Shahzad Khan and I are grateful for the contributions of Domenico Barbieri, Matt Lowery and Jeffrey Salas.

In fact, we have had such a great experience with these gentlemen that we are looking for another intern. This time we are looking for an Industry Research Intern who can help us diligence the industries represented by the deals--both public and private--we are working on. The ideal candidate will have experience in either public equities or private equity and will have an established process for what he or she does when someone drops a new industry into his or her lap.

I have included a brief description of this role below. We would love for the person to start as soon as possible.

If you or anyone you know might be a good fit, please feel free to reach out to me at [email protected] or share this post with others.

Thanks a lot!

[Ben Claremon @BenClaremon]

[New Compounders Podcast] Our guest on the show this week was Daniel Rupp, CFA, the Founder and CIO of Parkway Capital. After spending many years at a very well-known, Asia-focused investment firm called Overlook, Dan founded Parkway Capital to take advantage of some of the less liquid and smaller-cap opportunities he was consistently unearthing. Dan is the first Asia-only investor we have had on the podcast, and I was excited to speak with him about:

• The types of opportunities he thought he could invest in with a smaller capital base;
• How he is building his team and his asset base;
• The Parkway portfolio, which consists of Compounders, Defensive companies and Deep Value stocks;
• Why he is so constructive on the Chinese market right now; and
• The investment case for Chinese white goods manufacturer, Haier

Please enjoy this excellent deep dive into the Asian equity markets here: https://t.co/3FjgTZSsq1

[Ben Claremon @BenClaremon]

Devonshire Partner's Q3 letter went out today. The theme is differentiation and I discuss where in the highly competitive US equity markets--private or public--I believe there is still room for an investment firm or investment strategy to be truly differentiated.
You can find the piece on the Compounders Substack: https://t.co/yTJ2xVPXmW

[Ben Claremon @BenClaremon]

[New Compounders Podcast] Our guest on the show this week was Bill Bennett, the CEO of Innovative Food Holdings ($IVFH). After spending a number of years for working for big companies like Wal-Mart and Kroger, Bill became the CEO of Innovative Food in early 2023. Since that time, he has been leading an aggressive business improvement plan that has started to bear fruit. In this conversation, we covered:

• What initially attracted Bill to the company and the CEO role;
• Where Innovative Food Holdings plays within the specialty foods subsegment of the massive foodservice industry;
• The divestitures the company has made to simplify the business;
• The secular tailwinds behind the specialty foods category; and
• What the company needs to do to hit its EBITDA and revenue targets.

Please enjoy the full episode here: https://t.co/hYEBHDZY3o

[Ben Claremon @BenClaremon]

[Compounders Podcast Clip] There are thousands of microcap companies in North America and for someone who wants to invest in smaller companies, there is a lot of territory to cover. With that in mind, I asked @AKWilk of Greystone Capital Management about the profile of a company that he willing to spend his valuable time on. In his response, he mentioned the qualities he looks for. Some people might be surprised that investors can find companies with durable cash flows in the microcap space.

Please find the full episode here: https://t.co/FwO4vI1BI6

[Ben Claremon @BenClaremon]

Thanks so much for listening, @iancassel. That is a very nice compliment coming from you. @AKWilk is a super thoughtful investor who has a chance to become one of the best microcap investors in the game.

[Ian Cassel @iancassel]

Great interview with @AKWilk

[Ben Claremon @BenClaremon]

[New Compounders Podcast] Our guest on the show this week was @AKWilk, the Founder and CIO of Greystone Capital Management. Adam is a savvy microcap investor who prefers to run a very concentrated portfolio. In this in-depth conversation, we covered:
·      How Adam applies learnings from being an NBA scout to the investing realm;
·      Why he has chosen to own so few companies;
·      The types of microcap companies that Adam gravitates toward;
·      His approach to assessing management teams; and
·      What it was like starting a new firm in March of 2020.

For anyone (like me) who is a sucker for sports-investing analogies, this was a fun episode.

Please enjoy it here: https://t.co/FwO4vI1BI6

[Ben Claremon @BenClaremon]

@PVofFCF Thanks so much for listening, Graham.

.

[Ben Claremon @BenClaremon]

[New Compounders Podcast] Our guest on the show this week was Jim Edwards, the founder and managing partner of Maestria Partners. Jim and I were at UCLA Anderson together. From there he spent a number of years working for big university endowments (including UCLA's) before launching Maestria in 2023.

Jim is a fundamental investor at heart who thought deeply about how to differentiate his firm before going out on his own. In this wide-ranging conversation, we discussed:

·      Jim’s journey from the allocator world to launching his own investment firm;
·      What he learned about differentiation and best practices during his time as an allocator;
·      The types of business models he gravitates toward;
·      His approach to valuing companies that the market already has a deep appreciation for; and
·      Why he has chosen to run a pretty concentrated portfolio.

Please enjoy this insightful conversation here: https://t.co/IAKgwNa0Oz