History
Levered Insight was launched in 2016 to seek opportunities at a unique time in the history of US financial markets. Against a backdrop of relatively slow domestic growth and abnormally low interest rates, many corporations have levered up their balance sheets for M&A or share buybacks. As inflation or economic growth return to our economy, interest rates will begin to climb and pressure capital structures of businesses with high financial leverage or with artificially high credit created demand for their products. While the markets price most securities efficiently, those issued by firms who hit rougher patches requiring RWRs (Recapitalizations, Workouts, and Restructurings) will see capital flight that will create unusually attractive investment opportunities.
In the course of over 30 years of investment experience and delivering superior returns to small cap investors, Eduardo Brea has gained a uniquely valuable set of experiences. Businesses with a high degree of operating or financial leverage can be extraordinary investments, both long and short, based on a holistic analysis of the business fundamentals and a keen understanding of the dynamic nature of the capital markets from an equity and credit point of view.
More specifically, we've developed an investment philosophy with the following components:
Investment opportunities, both long and short, can develop from deteriorating fundamentals in business models compounded by emotional investor sentiment.
For long investment opportunities, we believe it is paramount that the business has a demonstrated historical record of viability and free cash generation.
For short investment opportunities, we believe early fundamental dislocation combined with high financial leverage often make excellent candidates.
Public equity and fixed income securities are individually selected based on judgment regarding their risk-adjusted rate of return.
Biography
Founder and Chief Investment Officer
Eduardo A. Brea, CFA
Eduardo A. Brea, CFA is the founder of Levered Insight LLC. He has 35 years of experience in the investment management industry dedicated to small cap value investing. Prior to founding Levered Insight, Ed spent 21 years as a small cap value portfolio manager and Senior Managing Director of Sterling Capital Management, a $54 billion asset management firm. He also served on the Board of Directors of Avatar Holdings from 2002-2009. Ed is married with three children and serves as current Board President of NourishUp, a not-for-profit focused on the food insecure in Charlotte.
Education
University of South Florida
MBA, 1990
University of Florida
B.A., Finance, 1988