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Mensagem from the Chairman & Chief Executive Officer

April 30th, 2017

Casa de Investimentos’ founding purpose is to create wealth for its Clients and to remunerate its associates and shareholders fairly. At Casa de Investimentos, the shareholders are the managers. That is why we are proud to announce that, in 2016, a year fraught with volatility, Casa de Investimentos has achieved a net return of 16%. 

Transparency – in the information relayed to Clients, regulators and investors in general – and Financial Education – both inside and outside Casa de Investimentos – are the pillars on which Casa de Investimentos was built. Transparency breeds trust and forges long term bonds. Knowledge prepares us to better defend the interests of all parties involved. 

In last year’s Report, page 17, I wrote the following to our Clients: 

“We work to deserve your trust. Even though we haven´t added value in 2015, we believe that the investments in our portfolio will achieve better returns than the markets. This conviction is based on our being invested in a collection of companies with high returns on equity and trade at 12 times their earnings, substantially below the S&P500 average”. 

We are grateful to our Clients for trusting our judgement in times of great uncertainty such as the ones we lived through last year. We know our Clients are bombarded with many opinions contrary to ours but, nevertheless, they withstand the volatility in their portfolios and helps us protect their patrimony. 

We are thankful for the cash reinforcements in their accounts and the flexibility that allows us to keep on collecting extraordinary business and /or buy more of the positions already in the portfolio. We are convinced of the importance of these reinforcements in the returns over time. 

We manage in your name and for your benefit. We manage you Money just like we do our own. Our commitment to you is for the long run. The investment philosophy we follow – friend of value creation – and the ability that some companies have of generating wealth for their shareholders make sure that, if we stay in the market long enough, we will be very well compensated. 

It is fundamental to be prepared to have a permanent seat at the market. There are times when it pays to be almost fully invested and there are others when accumulating liquidity allows us to take advantage of opportunities that mays appear and which we cannot predict. This is what we have been doing for the past six years. 

We make no attempt to predict market movements. We devote all our efforts to finding undervalued assets and acting as guardians of your investments. 

Obviously, the market will suffer corrections from time to time. When that happens, it is to be expected that your portfolios will show lower prices. This does not mean that your portfolios are worth less. What it means is that, in those occasions, if you need money, the price we will be able to sell these businesses for will be lower. We try to use these occasions to buy lots of value at small prices. 

Your trust and recommendations of Casa de Investimentos has been a tremendous incentive to do better every day. Thank you very much.

To all associates of Casa de Investimentos, thank you for the effort, professionalism, dedication and passion with which I see you working every day. In a very difficult year, we have managed to achieve a return of 16% net of all fees (transaction, custody and management fees and taxes). 

Casa de Investimentos team has been reinforced with new associates that share the same investment philosophy and culture. It has been an enormous pleasure working with you. 

The shareholders, including me, have reinvested all profits earned since the foundation of Casa de Investimentos, in an effort to improve human and technical resources. We will continue to reinforce the team so that our growth will be sustained. 

Two years ago, we have applied for a license as fund managers. We hope to have that license soon. Our purpose is to allow smaller savings access to a value strategy. 

The fact that we are owners and managers of the business allows us to focus the growth strategy in the long term and eliminates conflicts of interest – so fertile in the financial industry, with layers upon layers of managers, consultants and other helpers that end up being the true beneficiaries of their Clients’ money. 

The Social Capital of Casa de Investimentos has been increased from 500 Thousand Euros to 1 Million Euros. This is a clear sign to our Clients, regulators and associates that we are working for the long run. We know that the trust and respect of our Clients, associates, regulators and the public in general need to be earned every day. We assure you we are devoted to earning it. 

I end this letter with the pledge that we will not stray from the path we have set almost ten years ago when the guiding principles of Casa de Investimentos were established. The interests of our Clients will always be placed first.

It’s a privilege to work at Casa de Investimentos. We work every day so that our Clients will be old Clients.

Emília O. Vieira