GRT Deep Woods Strategy

Deep Woods Strategy from GRT Capital Partners, L.L.C.

The investment objective of the GRT Deep Woods strategy is to seek capital appreciation by investing primarily in micro-capitalization size companies. The GRT Capital expects to include companies with a capitalization, currently, of up to approximately $500 million at time of purchase. GRT Capital may focus especially on issuers with less then $100 million in capitalization at the time of investment. The GRT Deep Woods strategy will invest primarily in domestic companies, however, the GRT Deep Woods strategy may also invest in foreign companies. In addition, the GRT Deep Woods strategy may take short positions in the securities of companies of any size.

GRT Capital believes that the inefficiencies of the market for micro-capitalization size issuers (“micro-caps”), can provide good investment opportunities. For example, because micro-caps are often ignored by many analysts and investors, potentially good investments may be overlooked and available. The large number of micro-caps also enlarges the possibilities. Large investors often avoid micro-caps because the large size of their investment in a given micro-cap would constitute a major portion of the micro-cap’s outstanding shares and thus make the large investor’s position illiquid. For this reason, the Partnership expects to intentionally keep its total portfolio small.

GRT Capital’s process favors lesser known, out-of-favor, and/or complex situations. GRT Capital may look for, among other things, special situations that are driven by particular events, such as micro-caps are that are involved in spin-offs, capital restructurings, post-bankruptcies, mergers, and liquidations. Short positions may be taken as a portfolio hedge or for direct profit in companies which are short candidates because of, for example, extreme valuations, weak business plans, deteriorating fundamentals, or the overhang of excessive dilution.

Read more:

Portfolio Manager Todd Rosner