RiverCircle Investments

In Ancient Greek geography, Okeanos was a River god, A Titan God that flowed in a circle around the Earth. From its stream, all rivers and clouds drew their waters. Okeanos was a river that flowed into itself.

Rivers played an important role in Greek Philosophy because they illustrated the eternal flow of time and the link between constancy and change.

Greek philosopher Heraclitus is credited with the idea that the only constant in life is change. To this, he drew an analogy of life to a river: No man ever steps into the same river twice; for it is not the same river and he is not the same man. Plato later took this analogy to mean that all things are in constant flux, regardless of how constant they might appear.

The idea of a circular river was entirely correct in the sense that water on earth is perpetually being recycled in the ecosystem. RiverCircle is essentially an ecosystem.

RiverCircle Investments operates in an investment world that is constantly changing. The very best opportunities are unique, requiring the right confluence of management, product and business model.

You cannot build a statistical screen to find this kind of unique investment opportunity in an ever-changing world. It takes a process of persistent and repeated enquiry, and the insight gained from developing strong relationships with management. It is through our rigorous process and continuous company contact that we develop the confidence to hold concentrated positions in illiquid companies over a long period of time. 

That said, the overall investment ecosystem is nevertheless constant. To be sure, sometimes the market is in flood and sometimes it is in drought, but these patterns recur with the same regularity in financial markets as they do in nature. The ancient Egyptians waited for the flood before they planted, and they harvested before the annual drought took hold. Whilst we seek out the outsized opportunities that small caps present, we must also adapt to the vicissitudes of the market, embracing risk when conditions are favourable and reducing risk when dark times loom.

Constancy and change are inextricably connected in financial markets as they are in life. Change creates one-off opportunities at a company level that can only be exploited by a uniquely hands-on investment approach. At the same time, the investment environment presents specific challenges to a small cap portfolio that can only be offset by adjusting portfolio risk to exploit regular market patterns.

This recognition of the importance of the investment ecosystem is exceptional among deeply fundamental small cap investors, who normally eschew macro considerations. We think that this combination makes RiverCircle Investments unique.