Nartex Capital has just received approval from the CNMV to become an investment fund manager. The company founded in 2021 by Tomás Maraver and Íñigo Gasset represents one of the most brilliant success stories of wealth management on the national scene, reaching 400 million euros in assets in less than four years. This is the volume managed by the Incometric Nartex Equity fund, for which Maraver and Gasset have so far been consultants to the management company Dux Informaziones. They now have their own management company to pilot this investment vehicle.
Maraver (Madrid, 1984), investment director of Nartex, has developed almost his entire professional career in London. After studying industrial engineering at ICAI, he went to the United Kingdom to work at the American bank JP Morgan; He then spent almost seven years at KKR (one of the global venture capital giants), ending up running a hedge fund at King Street Capital Management.
Maraver belongs to a new wave of investors millennials which has managed to carve out a niche for itself in one of the most competitive sectors in the world. “Managing a hedge fund in London for five years is what left its mark on me the most. From there I brought the investment process and philosophy,” explains the manager.
Nartex Capital specializes in investing in quality companies at a reasonable price. The fund’s current portfolio is characterized by fears of the bursting of the artificial intelligence (AI) bubble, which has led Maraver to entrench itself in more defensive stocks, such as the card company Visa or the credit rating agency Moody’s. The fund lagged the market in terms of profitability, with a loss of 5% year-on-year. But it’s something that doesn’t worry the manager.
Ask. His latest monthly letter to fund holders addresses the risk of the AI bubble bursting. Is the situation so worrying?
Answer. Here’s how we see it. The evidence for the existence of this bubble is clear. Revenues and valuations of AI companies are inflated. We have distanced ourselves from these types of companies, although we can hardly escape this year’s stock market rally. It should be remembered that 75% of the stock market appreciation since ChatGPT was launched three years ago is basically explained by artificial intelligence.
Q. What are the signs?
R. Here there are companies that design microchips, like Nvidia, others that produce them, like TSMC, others that buy them, like OpenAI, Oracle, Amazon or Meta. And they’re all making a lot of money and making a lot of money. The question is whether the adoption of AI is making end customers more money or more efficiently. And the answer is no. Enormous amounts of resources are invested without a reasonable level of return being achieved yet.
Q. What numbers are we talking about?
R. Investments by the so-called hyperscalers (Microsoft, Amazon, Meta, Oracle…) this year will be around 400 billion dollars (344 billion euros). If we include several emerging competitors, this investment is expected to exceed $1.2 trillion (€1.03 trillion) over the next four years. For this huge investment to be profitable, it should generate a lot of value. If many, many incomes do not appear, which are not visible for now, the bubble is destined to burst.
Q. Is it that clear?
R. The bubble will burst, no matter what. I am 100% convinced. The only question is when he will. The parallels between what happened with the dotcom bubble of 2000 are clear. Millions and millions are invested in microchips and computing power, but these investments must be monetized. That’s why we are increasingly clear about focusing on investing only in quality companies.
Q. In the last month, worrying news has arrived on several cases of contracts and cross-shareholdings between OpenAI, Nvidia, Oracle…
R. It is another clear bubble indicator. Nvidia invests in OpenAI, OpenAI enters into $300 billion supply deal with Oracle, Oracle spends millions on Nvidia chips. The turnover figures are dizzying, but also very artificial. As a manager it is not easy to decide to stay out of these dynamics, but I believe that acting in this way is the most sensible thing for the customers who have entrusted us with their money. Furthermore, it is a great opportunity, because everything that is not pure technology is valued at attractive prices.
Q. Have you always stayed away from the technology sector?
R. At all. In 2022, after sharp interest rate increases, the prices of large technology companies have suffered greatly. Then we saw the possibility of investing in companies such as Microsoft, Alphabet or Meta at extremely interesting prices. In some we managed to double, or even quadruple, the money invested. This year we invested again in Microsoft, but we have already closed the position.
Q. What kind of companies replaced those companies in the background?
R. We always look for companies that are not indebted, have a very strong market position, a near monopoly and have good levels of return on capital. We started with a universe of about 120 companies and ended up with only about 20. Now we’re at Airbus, which gives us very good visibility into future revenues. We have also entered several pharmaceutical companies, such as Waters, which deals with liquid chromatography. We have also added Universal Music.
Q. Are you planning to raise new funds?
R. No. We are very comfortable with this strategy. It’s what we do best, even if this exercise is difficult and we are behind the market. We believe we have a competitive advantage here. Furthermore, it is a very scalable strategy.
