Cantillon Capital Exits The Brink's Company Stake

William von Mueffling's investment firm Cantillon Capital has filed a 13G with the SEC regarding shares of The Brink's Company (BCO).  Per the filing, Cantillon no longer holds any shares.

The filing was made due to activity on December 31st.  Previously, they held over 3 million shares of BCO.

Cantillon used to be a hedge fund, but in around five years ago morphed into a long-only firm.  To learn more about this manager, head to von Mueffling's interview with Columbia Business School.

Per Google Finance, The Brinks Company is "a provider of secure logistics and security solutions services ATM replenishment and maintenance, secure international transportation of valuables and cash management services, to financial institutions, retailers, government agencies including central banks, mints, jewelers and other commercial operations around the world. The Company operates in four geographic segments: Latin America; Europe, Middle East, and Africa (EMEA); Asia Pacific, and North America."

Interviews With Sam Zell, William Von Mueffling & Michael Karsch: Columbia Business School Newsletter

Columbia Business School is out with the latest installment of its investment newsletter: Graham & Doddsville. Edited by MBA students, the issue features interviews with Sam Zell (Chairman of Equity Group Investments), William von Mueffling (President of Cantillon Capital), and Michael Karsch (founder of Karsch Capital Management).

Below are some excerpts we found insightful:

Sam Zell on key tenets of his investing philosophy: "I philosophically believe that if you can't delineate your idea in one or two sentences, it's not worth doing ... simplicity is critical."


Sam Zell on what has allowed him to be successful: "The definition of a great investor is someone who starts by understanding the downside. You must make the judgment in advance as to how much downside risk you are willing to take. I knew that I could always survive the good days, but the critical element is to be able to survive when the market isn't doing well or the investment isn't performing. I always focus on how much exposure I am taking."


William Von Mueffling on Cantillon's investment style: "One can broadly divide value investing into two camps. The first camp is the Graham & Dodd style which is buying assets at a discount or cash at a discount. The second camp is the Buffett style, which I characterize as buying financial productivity at a discount. We fall into the second camp. We believe that there are many different types of moats to be found, and that a moat around a business should allow it to produce outsized margins and wonderful returns on capital. The trick is being able to buy this stream of cash flows at a discount. Unlike Graham & Dodd investing where you might look at low price-to-book value companies or net-net companies, we are trying to buy high financial productivity at a discount to its intrinsic value."


Michael Karsch on the lifecycle of investing approach: "(It) is a framework that states that markets, industries, companies and stocks typically move through 5 stages over time. These stages are: 1) distressed, discarded and/or undiscovered, 2) value, 3) growth at a reasonable price (GARP), 4) growth, and 5) momentum. The lifecycle analysis and an appreciation for a company‘s evolution through the cycle often lead us to ask whether a company will be perceived as better (up the cycle) or worse (down the cycle) over a reasonable investment horizon."


Embedded below is the Graham & Doddsville issue:




For more from these three investors, we've posted:

- Michael Karsch on risk management

- Sam Zell on Brazil's investment opportunity

- Cantillon converts from hedge fund to long-only

Cantillon Closing: William von Mueffling's Hedge Fund Converting to Long Only

William von Mueffling's Cantillon Capital Management will be closing down the hedge fund portion of their business. They will wind down their positions except for $1 billion worth of long positions as they revert to a long-only shop. We've not covered Cantillon in our portfolio tracking series before, but von Mueffling is quite a prominent name in the industry. His firm had $10 billion assets at their peak and more recently had around $3.5 billion assets under management. He founded the firm in 2003 after leaving Lazard, where he helped build up their hedge fund business. Like many of the long/short equity hedge funds we track, Cantillon is a stock picking firm.

However, their picking has clearly not been at its best recently. While von Mueffling outperformed other hedge fund managers on a relative basis in 2008, his results were still poor on an absolute return basis. For 2009 they are reportedly down 7-8% through May. Yet, despite his recent hiccup in performance, he certainly carries with him a solid background and performance record. As such, we may consider tracking his long only investments from here on out, as this could potentially be an ideal type of hedge fund to track via 13F filing. We could then create a portfolio based on their holdings with Alphaclone and not have to pay any management fees. After all, we like straight up stock pickers and we won't have to worry about the short side of the portfolio.

As for the rationale behind closing up the hedge fund portion of the firm, von Mueffling had this to offer in the letter to investors, "Firstly, in recent weeks, we have found ourselves covering a large number of shorts in the Cantillon World and Cantillon Europe hedge funds (the "Funds"). This is likely to continue and therefore the Funds' portfolios in the future are not likely to exhibit the characteristics that we have always targeted for the Funds. Secondly, we want to focus on our long-only strategy which we launched in 2005. Today, the stocks that we own in this strategy have the best characteristics that we have seen in a decade." They expect the liquidation to take three months and will do so in an orderly fashion, while leaving the option for investors to transfer their investments into the Global Equity funds.

William von Mueffling is intriguing as a manager because NY Magazine had previously labeled him a 'whippersnapper' in the hedge fund industry as a legend in the making. He was in good company on that list, as out of the funds we cover, Chase Coleman of Tiger Global, Peter Thiel of Clarium Capital, and Eric Mindich of Eton Park Capital were all also on the list. Also included were John Arnold of Centaurus Energy and David Ganek of Level Global.

Cantillon now joins an ever-growing list of hedge funds to shut down amid the crisis. So far, we've already seen Jeffrey Gendell's Tontine Associates close 2 funds, Art Samburg's Pequot Capital shut down, James Pallotta's Raptor Capital close for re-evaluation, while Satellite Capital Management and Okumus Capital have closed too. As time goes on, we're sure more closings will undoubtedly emerge from the woodwork. We've postulated all along that the hedge fund industry will weed out the weak in a Darwinian process, where only the strong few will survive the crisis. And with that, we'll conclude this piece with a list of further 2008 closures.