Eden Discovery is a hedge fund specializing in uncovering small companies with unique stories that are at a pivotal business juncture and are mispriced by the market. The fund's goal is to invest in companies that are close to this turning point and benefit from the market's discovery process over time.

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The Intersection of Story and Numbers

There are investors who specialize in numbers-based investments—such as undervalued or high-growth companies. These are quantitative investors. Others specialize in investing based on the company's narrative—such as a "company that will dominate the artificial intelligence market." These are "story" investors. We operate at the intersection—where strong stories meet strong numbers. All our companies have a compelling story backed by solid financials.

 

An Interesting and Simple Story

All our companies have interesting and unique stories, but we make sure they can be explained in 3 minutes and avoid complicated stories.

 

Small Cap Stocks

We usually focus on companies with a market value of less than $10 billion, with the vast majority being under $1 billion. The small-cap stock market is known for its superior returns—so we are fishing in a rich pond from the start.

 

Exceptional Markets

We are not afraid to invest in exceptional countries within developed markets, such as Poland or Greece, and we often find ideas in exchanges that are not well-known globally. There, our relative advantage is magnified many times over compared to other markets. We are a refreshing breeze in an industry that mostly focuses only on the United States.

 

High Return on Invested Capital (ROIC) and Long Runway

When selecting small-cap stocks, sometimes the results are amazing. About 84% of stocks that have yielded over 10,000% (100 times) in the past 30 years started with a market cap of less than $1 billion. However, one essential condition to "catch" such a company is a high return on invested capital to activate the "compounding engine" and a very long runway to allow that engine time to work.

 

Concentrated Portfolio

Good ideas come sparingly. When we find an idea, we allocate enough capital to it so it can reward us accordingly. We aim to hold 10-15 ideas at any given time.

 

The Opportunity

The fund's expertise is in small companies abroad. After the end of the 2022 crisis, the recovery process for large companies has ended, but small companies are at a historic valuation low, providing a tailwind for our fund.