In exceptionally well-governed companies, these gaps lead to the discovery of undervalued stocks and we capitalize on that dissonance. In poorly governed companies, the stock values may be incorrectly assessed on the high side and we are able to capitalize on those opportunities as well.
Northfield, Minn. (PRWEB) March 18, 2009
David R. Koenig announced today the launch of The Governance Fund, LLC, a private investment management firm that uses a proprietary model of corporate governance to differentiate well-governed publicly-traded companies from those which are poorly governed and seeks to capture their hidden investment value.
Koenig is an internationally recognized expert on risk management and governance. Blending his distinctive experience in active asset management with this expertise, Koenig has created an investment management firm specifically designed to discover and capitalize on what he terms "the value gap" between well-governed and poorly governed companies. The Governance Fund, LLC will utilize guiding metrics centered on effective corporate governance in seeking to realize undiscovered returns and extract hidden value from companies.
"Good governance adds value," said Koenig, who will serve as Chief Executive Officer of the new company. "The Governance Fund, LLC will evaluate companies based upon how well they are governed, using layered proprietary analytical tools as a means of enhancing returns," he said.
Koenig has invested years in developing his investment model. Published academic research shows that well-governed companies can achieve excess returns of anywhere from 8 - 15 percent over their peer companies that are less well-governed, according to Koenig. Corporate credit ratings are higher when board independence, board stock ownership and board expertise increases, he explained. Conversely, credit ratings decrease as a CEO's power on the board increases, one of the signs of a company that may not be following best-practice governance. "We use our proprietary understanding of best-practice governance to discover the gaps between how companies are valued and how well they may actually perform," Koenig said. "In exceptionally well-governed companies, these gaps lead to the discovery of undervalued stocks and we capitalize on that dissonance. In poorly governed companies, the stock values may be incorrectly assessed on the high side and we are able to capitalize on those opportunities as well."
The Governance Fund, LLC will employ the concepts of good governance in its own operations. The Governance Fund LLC has been structured to offer unique advisory client-friendly transparency, liquidity and an advisory board to assist the company in connection with risk management regarding its operations.
Prior to founding The Governance Fund, Koenig served as the Chair of the Board of Directors of PRMIA, a non-profit professional association serving the risk-management and governance profession. He also served as Managing Director and Head of Market and Institutional Credit Risk Management for U.S. Bancorp Piper Jaffray Inc. where he coordinated independent oversight of all market and institutional credit risk on capital markets inventories and risk oversight of the portfolios of First American Asset Management group, the mutual fund family of US Bancorp. While there he also led the strategic incorporation of risk management into all business-line planning. In 2008, he was awarded the PRMIA Higher Standard Award, the top honor from that association and in 2007 was inducted by his peers as one of the first 100 members of the Risk Who's Who international honorary society, which recognizes individuals for their contributions to the global risk management profession.
Koenig received his Master of Arts degree in Economics from Northwestern University in Evanston, Illinois and is a graduate of Miami University with a Bachelor of Arts Degrees in Economics and Mathematics.
For more information, please contact The Governance Fund, LLC at +1.507.301.3149 or e-mail info (at) thegovfund.com.
David R. Koenig