Cedrus Nanotechnology Portfolio
Cedrus’ nanotechnology portfolio adopts a long/short equity strategy with the goal of achieving consistent, above-market returns from investing in innovative companies that utilize nanotechnology, in all or part of their business portfolios, in the following five sub-industries: nano-electronics, nano-manufacturing, nano-energy, nano-life sciences and nano-environment.
We view the intersection of these five sub-industries engaged in nanotechnology as a dynamic and rapidly-growing arena for existing and emerging companies, which are in the nascent stages of their development. We expect many leading companies of the future to evolve from this arena, as invention and applications of novel technologies combined are required to satisfy the world's increasing demand for new and improved nanotechnology-based products to tackle the most pressing problems facing global economies, humanity and the planet.
Value in a Dedicated Nanotechnology Portfolio
The investment community has largely overlooked or being skeptical about nanotechnology as a cohesive industry, causing the mispricing of such assets and creating attractive investment opportunities for savvy investors;
Low correlation among the five nano-markets and their relatively high volatility create an ideal sector for stock selection and alpha generation;
Within a quarter, the difference in returns between the leading and lagging nanotechnology stocks has been in wide ranges; and
Cedrus’ holistic view enables a framework to compare relative growth across various industries and identify the largest competitive advantages that nanotechnology companies have relative to their traditional peers.
The strategy of the portfolio is to use a proprietary combination of fundamental, quantitative and technical analysis to take advantage of mispricing in the equity markets of the leaders and laggards within the nanotechnology industry. We employ a long/short strategy to manage the portfolio, coupled with several risk management controls and metrics including, but not limited to, net long exposure (by dollar value and beta), initial position size as a percentage of the whole portfolio, different maximum position sizes for longs and shorts, sector concentration, position liquidity, stop losses for individual positions and the portfolio as a whole.
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