Etalon Capital Launches SPINOFF Index

15 January, 2018

Story investing philosophy brings an extra edge to analyzing spin-off situations

Etalon Capital Ltd today announced the launch of the SPINOFF Index. The index is designed to provide investors with information and exposure to spin-off companies (or, occasionally, their parent companies).


“Over past few years we have seen that spin-off transactions are becoming less shareholder-friendly. The motives to spin-off divisions, which are used to be transparent and shareholder-friendly are becoming more aggressive. Parent companies sometimes want to unload a business of poor quality on unsuspecting investors”, says Alex Gavrish, CEO of Etalon Capital.


This creates a situation where a simple buy-and-hold strategy of investing in spin-off companies does not work anymore, and more qualitative judgement and perspective are required. The investment philosophy of looking at any company and its share as a story allows us to bring an extra edge to analyzing spin-off situations as well. The new index will give investors more information and add an additional perspective to this market segment.”


The SPINOFF Index is a unique index that tracks the performance of companies that were spun-off during the last three years. The index tracks the performance of a representative portfolio of spin-off companies with a market capitalization of at least $1 billion.


The index might also include parent companies. Geographically, the index has a global mandate but is more focused on U.S. companies. Companies are expected to remain in the index for up to 36 months since addition.


Alex Gavrish, Chief Executive Officer of Etalon Capital, said, “Spin-off transaction represents an important corporate event. It becomes an important turning point in company’s story. Spin-off market segment is not as simple as it used to be and we hope that this index will provide more information on these transactions and highlight interesting investment opportunities.“


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