Swen Lorenz – Carefully Consider Liquidity in Your Portfolio

BIO: Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe.STORY: Swen had a 12.5% stake in a German fund manager performing well. A competitor wanted to buy up companies in that space and approached Swen to ask other shareholders if they would sell. The company didn’t like this, asked the regulator to look into Swen’s affairs, and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle.LEARNING: Carefully consider the liquidity of the investments you’re holding. Going above the disclosure threshold as an investor is dangerous. “I’m a big proponent of investing into stuff that’s liquid and where you can get in and out quite easily, even under extreme circumstances.”Swen Lorenz Guest profileSwen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe. His trademarks include extensive investigative reports, which give investors plenty of inspiration and ideas to work with.Worst investment everSwen invested in a German wealth and fund manager. The company fitted his investment profile; it seemed appealing to his common sense and had huge potential. Swen felt that he was ahead of everyone.The company was listed in the late 1990s through a quiet listing. Swen liked that because there were virtually no headlines about this listing. The company came with excellent fundamentals, had superb dividend yield growth prospects, and growth rates from the past were excellent. So Swen was basically buying growth at value prices. The company’s market cap was just 50 million euros, but it set out to conquer the German market for independent fund managers and wealth managers and take away market share from the banks. That was the big idea. And that was something Swen believed in.In 2003, during the Dotcom crash, a major investor was forced to liquidate. Swen bought as many shares as possible and got a 10% stake in the company, eventually 12.5%. That meant that suddenly, he was on the public register. It also meant that he was highly visible. Swen had bought most of the stock at a pretty low price.The investment went great until a competitor wanted to buy up companies in that space. The competitor felt it was a great idea not to approach the CEO, the major shareholder, but to instead call Swen first. He asked him to do a survey as an independent entity and speak to shareholders to see if they were willing to sell.Little did Swen know what he would kick off by having that conversation with other shareholders. He informally approached the CEO and a variety of other large shareholders. The CEO Swen spoke to was not entirely straightforward. He said he wanted to sell, but that was not the case. The other stakeholders, however, wanted to sell. For most of them, it was just a matter of receiving the highest offer possible. But it all became complicated and contentious.The company eventually asked the regulator to look into Swen’s affairs and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle. He spent half a million euros on lawyers. He was in the public and