Claudio Guazzoni was interviewed by Jack Schwager in Stock Market Wizards. The reason for his inclusion in the book was his track record of 37% over a five-year period without a losing month.
Claudio Guazzoni is the founder and CEO of Zanett Asset Management. He is also the co-founder of Stably Blockchain Labs, although he does not work there anymore. Before he co-founded Stably Blockchain Labs, Claudio built and sold a 357-person firm to KMPG. He co-founded Zanett, Inc.— an Oracle consulting company, in 1999. Before that, Claudio co-founded Planet Zanett— an internet incubator that was listed on the NASDAQ composite.
Claudio Guazzoni’s life, trading career, and trading strategy
His family emigrated from Italy when he was 16. Both of his parents were nuclear physicists (his mother was also an Olympic skier). The U.S. Department of Defence recruited them as part of a classified cold war program.
Claudio, however, spoke English without any accent; he also spoke five other languages fluently. He graduated from Yale University with a B.A. in Economics.
Claudio joined Salomon Brothers in 1985. He started as a trainee in the Bond Department for six months. He spent the mornings in the classroom sessions and the afternoons helping out at the trading desks. It was a very awakening experience for him.
After the training program ended, Claudio was transferred to the London office — because he was multilingual. He was assigned to the government bond department — specifically market-making in government securities and options.
His primary role in the department was to provide liquidity for their overseas customers and their domestic customers during time zones outside New York. He was then transferred to Salomon’s merger and acquisition department in New York.
At Zanett Asset Management, a hedge fund he co-founded, eighty percent of the business they did was acquisition finance. They had thirteen companies in their portfolio, and each of them was consolidated in a particular industry group. An example was a firm that was consolidated in the hearing aid industry. They financed acquisitions and also negotiated the acquisitions.
The companies they invested in were already listed on a stock exchange, unlike venture capitalists who came earlier. Although these companies existed, they financed the company’s expansion, and in return, they got privately placed equity.
The deals they had were structured well, with returns guaranteed by the company. As long as the business stayed in business, they got a minimum preferred ROE between 10 and 20 percent. And if the company did well, its upside is skewed.
They used half a dozen different types of proprietary structures, but in all these variations, their returns were preferred and guaranteed as long as the company stayed in business.
Claudio’s early interests — photography and the study of the origin of languages were as far as they could be from the financial industry when he got involved in the financial market through a friend’s suggestion. Although his investment strategy, which required tens of millions of dollars to be implemented, was not a cheap option for the average investor, it is important to note that Claudio’s fund did not start from the sky. He started with a simple strategy — he bought restricted stocks at a discounted price and built his business one deal at a time.
Claudio’s approach of buying restricted stocks provided a perfect illustration of the principle: “Opportunities arise when some market participants are treated differently from others.”
Claudio’s Fund returned an impressive 37% annually since it began with no losing months registered.
What is Claudio Guazzoni’s professional background and his role at Zanett Asset Management?
Claudio began his career at Salomon Brothers in 1985, starting in the Bond Department before being transferred to the London office and later to Salomon’s merger and acquisition department in New York. He co-founded Zanett Asset Management, where the majority of business focused on acquisition finance, managing a portfolio of thirteen companies consolidated in specific industry groups.
What is Claudio Guazzoni’s investment strategy, and how did he achieve a 37% annual return with no losing months?
Claudio’s investment strategy involved buying restricted stocks at a discounted price. Zanett Asset Management returned an impressive 37% annually with no losing months registered. The fund’s success illustrated the principle that opportunities arise when some market participants are treated differently from others.
What types of companies did Zanett Asset Management invest in, and what was their approach to acquisition finance?
Zanett Asset Management invested in companies already listed on a stock exchange and focused on acquisition finance. They had thirteen companies in their portfolio, each consolidated in a specific industry group. The deals were structured with returns guaranteed by the company, providing a minimum preferred ROE and upside potential.