It is our pleasure to bring you an exclusive interview with Spanish value investor Alejandro Estebaranz, co-investment advisor of the True Value Fund. The interview was conducted in 2016.

Alejandro was an instructor at European Investing Summit 2016, where he presented on small-cap value ideas Umanis (Paris: ALUMS) and Neurones (Paris: NRO). A replay of Alejandro’s sessions are available in The Manual of Ideas Members Area.

MOI Global: Please tell us about your background and the genesis of True Value.

I can send you a list of a hundred wonderful businesses trading at fair multiples, but it is hard to find good businesses trading at low multiples.

Alejandro Estebaranz: I started working as a mechanical engineer, discovering value investing in 2008-2009 while looking for books at my local library. I found The Intelligent Investor. Value investing is a style that fits very well with my personality.

From that point, I became a value investing fanatic. I remember reading a new book every three days, and in six months I was ready to start investing my own money. It was an easy time because the markets were very cheap. I got good results with my personal account which reinforced my learning.

By 2012, I had left my job and was living from investing my own capital. In 2013, I met my partner Jose Luis Benito. He had been an active reader of my value investing blog. We started talking almost every day about stocks and value investing. After a while he said to me, “It would be great to start a new value fund”. At that time, he was running the equivalent of an IRA business in Spain.

We presented the idea to clients and started the fund in January 2014 with €2.5 million and 20 clients. Since then we have grown to €16 million and 800+ clients. Cumulative returns have been almost 40% net of fees in the last three years (compared with 17% for the S&P 500). It has been a wonderful experience.

MOI: How do you define your investment universe?

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