Bernstein Value & Income Portfolio ("BVIP")

Experience

The Managing Partners of Bernstein have each been in the banking and investment industry for more than 20 years. Both have become reasonably affluent in this process. Most of their net worth had naturally been generated by compensation for their work, rather than investment returns.

Understanding Benjamin Graham

Before meeting at Bernstein coming from different directions in 2008, the success in their individual investments was actually quite mediocre, to say the least. The breakthrough in their investment approach and subsequently performance can initially be attributed to the lecture (and understanding!) of one well-known and two rather unknown books on investing as well as reading all the annual letters written by Warren Buffett to the shareholders of Berkshire Hathaway:

Reading the Warren Buffett letters

1. The Intelligent Investor by Benjamin Graham, first published in 1949
2. The Options Edge by William R. Gallacher, first published in 1998
3. The Complete Guide to Option Selling by James Cordier, first published in 2004
4. Berkshire Hathaway Shareholder Letters, beginning with 1977

The key elements of these references combined with hands-on investing experience of their own funds have been condensed into the foundation of the investment philosophy of Bernstein termed rather frivolously (we would take that hit) “The 21st Century Intelligent Investor Commandments”.

Risk-conscious, smart use of derivatives

The labeling notwithstanding, we are absolutely serious and thoroughly convinced of the validity of these principles. Applying them has yielded – despite frequent set-backs and lapses – double-digit returns of our investments ever since we started in 2008.

In essence, the strategy combines time-tested principles of value investments with international diversification, income enhancements and hedging elements using derivatives within a disciplined, long-term oriented framework.

Long-term

Interested investors are encouraged and should feel free to test and implement these principles themselves and become successful long-term investors (rather than mere Speculators) on their own. Implementing all the elements is not entirely trivial but it can be done, so we would congratulate you to such a move.

Disciplined

Investors who prefer to benefit directly from applying our investment principles should join us as investors in the Bernstein Value & Income Portfolio (“BVIP”). The investments can be either effected as one-off payments or (resonating well with a cornerstone of our investment philosophy) monthly investment contributions. (Details on the straightforward technical & legal implementation can be found here: Legal & Other Unavoidable Technicalities)

Full buy-in

What we are looking for is a long-term investment partnership with likeminded people and institutions. That means we are in the same boat as you, continuing to allocate a major part of our liquid assets to the BVIP.

Carry of 20% above 8% hurdle rate 

There is only one way in which we are different as investors than you: 20% of any returns on the funds invested in the BVIP exceeding the hurdle rate of 8% per annum, calculated over a five year period, will accrue to us. We will receive neither an annual management fee nor any other compensation for managing the BVIP. Please check additional information and sample calculations on this approach here: "Allocation of profits & costs"

November 2021

June 2020

May 2020

Year 2019

September 2019

July 2019

June 2019

BVIP Investment Agreement

BVIP Investment Agreement

BVIP Investment Agreement for Companies

BVIP Investment Agreement for Companies

BVIP joint investment

Agreement

BVIP Joint Investment Agreement

Help on completion

Instructions

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