About the portfolio manager

David Diranko is a dedicated value investor with over six years of experience in public equity markets. Specializing in small-cap value investing, he invests his entire liquid net worth in his small-cap value strategy alongside his investors.

Before transitioning to a professional investment career, David worked as a Data Scientist and Machine Learning Engineer at IBM, and as a Data Analyst for MEAG, the asset management arm of Munich RE. He holds a Master’s degree in Mathematics in Data Science from TU Munich and a Bachelor’s degree in Business Mathematics from LMU Munich.

About the investment approach

Diranko Capital follows a value investing approach inspired by legendary investors like Benjamin Graham and Warren Buffett, focusing exclusively on long-only investments in publicly listed equities.

Our strategy is built on six core pillars, designed to enhance our chances of achieving superior long-term returns with lower risk compared to the broader market:

  • 1. Publicly Listed Equities

    Historically, equities have offered the highest risk-adjusted returns over the long term. The higher liquidity of listed equities, compared to private equity, provides better flexibility for investors.

  • 2. Global Scope

    Global diversification helps mitigate country-specific risks. Shifting exposure from overvalued markets to more attractively priced ones offers the potential for excess returns while simultaneously reducing risk.

  • 3. Small-Cap Companies

    Small-cap businesses are more likely to be undervalued due to size and liquidity constraints faced by many professional investors. Our focus on companies with a market cap under €5 billion increases our chances of finding undervalued opportunities.

  • 4. Quality Businesses

    Investing in high-quality businesses lowers investment risk, while simultaneously enhancing the potential for substantial long-term returns. Quality businesses are generally less vulnerable to stock market sell-offs.

  • 5. Attractive Prices

    Acquiring companies at discounted valuations reduces the risk of loss from valuation declines. Investing in companies with higher earnings yields enhances capital returns for investors.

  • 6. Concentrated Portfolio

    Focusing on the best opportunities increases the potential for outsized returns. Our target portfolio of 10-20 companies ensures sufficient diversification to mitigate company-specific risks.

To achieve our goal of identifying businesses with the highest potential for outsized returns without excessive risk, we adhere to a rigorous investment process. This process narrows down a universe of approximately 55,000 publicly listed companies to a focused selection of about 10-20 investments.

Reach out to learn more

If you want to learn more about Diranko Capital’s strategy, please reach out to us via contact details.