Schwarz Quant is being built as a multi-strategy alternative asset manager. The research behind it goes back to 2015, and in each of the areas below we found gaps we think are worth pursuing. None of that can start until we have regulatory authorisation, so that is where our effort is going now.
We talk to investors in Europe and further afield. We don’t manage client money today, and nothing on this page is an offer of investment services.
Private Equity
Private Equity
Most private equity outcomes come down to three things: what you pay, how much debt you use, and what you change after you own the company. We’ve researched all three, for established businesses in Europe and elsewhere.
Much of our attention has gone to Germany, where thousands of companies are in financial distress or restructuring. Many of them have real products, loyal customers and skilled people. Their trouble often has less to do with the business itself than with a balance sheet, a financing gap or a decision that came too late.
…that takes more than capital. A clear read of the balance sheet, tight control of cash, and managers and stakeholders who believe in the plan...
Our work so far rests on public information: filings, insolvency announcements, sector data and how restructuring cases have played out in practice. We haven’t approached any company, and we don’t claim to know any one business from the inside. What we have is a clear view of the patterns: where debt was the real problem rather than the operations, where a business depended too heavily on one customer or one cost, and where a restructuring worked and where it only delayed the outcome.
We believe a company with a sound core can be rebuilt, and that some German businesses, once stabilised and properly financed, can compete again with their international peers. That takes patience, an honest read of the numbers and a specific plan for the first year. It also means walking away from most situations we look at.
Status: sector research done, restructuring studies done.
Real Estate
Rates, credit conditions, demographics and demand drive property more than any single location does. A well-placed building can still be a poor investment if it was bought at the wrong point in the rate cycle or financed with the wrong debt.
We’ve covered residential, logistics and commercial property across Europe, North America and Australia, and looked closely at how each behaves in a downturn. Falling values, rising vacancy and refinancing pressure don’t hit every segment the same way. Residential rests on steady demand but is exposed to regulation and rent controls. Logistics follows trade and consumer spending. Offices and other commercial space depend on how people work, which has changed and may keep changing.
Our main focus is critical infrastructure real estate, including power, connectivity, land and the supporting facilities. Demand for this kind of capacity is rising faster than supply can be built, and projects of this kind reward careful work on site selection, power access, build cost and timing.
“…Residential rests on steady demand…”, “Logistics follows trade and consumer spending…” “…commercial space depend on how people work…” Demand for critical infrastructure is rising faster than supply can be built
Whatever the property, we start from the same place: what it earns, what it costs to build and run, what capital it needs and how it can be sold. Our engineering background helps here, because energy standards, ageing structures and construction costs can move a return as much as the purchase price, and they are often underestimated. That is how we value a property, and it is why we can tell a sound opportunity from one that only looks good on paper.
We have a clear view of the patterns, including where debt was the real problem rather than the property, and where income held up when values fell.
Status: market research done for our target segments. Preparing to launch.
Credit & Insurance
Credit is the clearest place to see risk being priced, for better or worse. Our work covers corporate, private lending, structured credit and asset-backed strategies, with insurers in mind as the main investors, since they need steady income over very long periods. We model the bad scenarios first: rising defaults, thin liquidity, correlations that jump.
Lending looks safe for most of the cycle and then stops looking safe all at once. Loans that seemed unrelated start to fail together, collateral is worth less than assumed, and the exit that looked available disappears. Much of our research is about that moment: which structures protect the lender, which only appear to, and how much of the stated margin is payment for a risk that was never properly measured.
“Lending looks safe for most of the cycle and then stops looking safe all at once.”
Private lending has grown quickly as banks have pulled back from parts of the market, particularly mid-sized companies that are too large for a bank’s standard product and too small for the public bond market. That gap is real, but it comes with its own risks: weaker covenants, less transparency and no easy way to sell a loan when you need to. We study both sides of that trade. In structured and asset-backed credit, we look at what sits underneath: the quality of the receivables, loans or assets, how the cash flows are split between tranches, and what happens to each tranche when the pool deteriorates.
Insurers are the investors we have in mind most, and they are demanding ones. Their liabilities run for decades, so they need income that arrives on time and holds up in a bad year. They also work under capital rules that make some assets far more expensive to hold than others, such as Solvency II in Europe and the risk-based capital framework in the United States. A credit strategy that ignores this is of little use to them. So we look at credit through the insurer’s eyes: how an investment is treated for regulatory capital, how it fits the maturity of the liabilities, and how it would behave in a stress test.
Underwriting a loan and managing a portfolio are different skills. We put equal weight on both: choosing what to lend against, and then watching concentration, correlation and liquidity so that no single event can do too much damage.
Status: credit risk research done and portfolio models finished. Next is building what insurers need from a manager, which is mostly reporting and governance.
Multi-Asset Investing
This is where the firm started. Before anything else, we wanted to understand how different markets affect each other.
They rarely move alone. Equities follow economic growth. Bonds follow interest rates and inflation. Commodities react to supply, demand and politics, and currencies reflect the gap between one economy and another. Study each of them separately and you miss most of what connects them. A portfolio can look well spread out on paper and still lose money in one place, because everything in it was reacting to the same thing.
…look for opportunities, to see where a portfolio is exposed, and to understand how positions behave together…
So our research puts equities, fixed income, commodities, currencies, alternatives and the wider economic picture into one framework. We use it to look for opportunities, to see where a portfolio is exposed, and to understand how positions behave together, especially when markets are under stress.
We want every holding to have a reason to be there. Diversification, for us, means knowing how the pieces move together, which is a different thing from owning a lot of them. Risk is sized deliberately, so it never ends up wherever the allocation happens to leave it.
Status: research and systematic strategy testing finished. Of all our areas, this is the furthest along.
Strategic Partners
Sometimes an investor needs cash before a fund has run its course, and someone else is willing to take the position. That is the secondaries market, and it is where this area begins.
It is wider than that, though. Existing investors, business owners and fund managers sometimes need a different kind of capital: to release money tied up in a private holding, to recapitalise a balance sheet, or to fund a deal that doesn’t fit a standard loan or a standard equity round. Our research covers private-market interests, secondary positions, structured transactions and recapitalisations, wherever capital can give someone liquidity or solve a financing problem that is hard to solve in the usual way.
Sometimes an investor needs cash before a fund has run its course, and someone else is willing to take the position. That is the secondaries market, and it is where this area begins.
These deals are harder to judge than public markets, because the value underneath is rarely on view. There is no live price to check against. So we start with the assets themselves: their quality, how the transaction is structured, what a fair valuation is, how long the money will be tied up, and how value actually gets realised at the end. We’ve also studied how stakes are priced, and where a headline discount doesn’t reflect what the underlying assets are worth.
Complexity puts many investors off, and we think that is where the opportunity sits for those willing to do the work.
Status: market structure and valuation research finished. Preparing to launch.
Tactical Opportunities
Flexibility when markets create unusual opportunities.
Markets do not always reward investors for following a fixed template.
Dislocated markets, restructurings and forced sellers create situations that don’t belong to any one asset class. We’ve built a process for spotting and assessing them.
The focus is on understanding what is happening, why the opportunity exists, what the underlying value may be, and what went wrong and what could go wrong again. Most opportunities will be passed on. We expect that.
Dislocated markets, restructurings and forced sellers create situations that don’t belong to any one asset class. We’ve built a process for spotting and assessing them.
The important thing is having the flexibility to act when the numbers, the circumstances and the potential return justify doing so.
We do not want to force an opportunity into a predetermined strategy. We want the freedom to follow the opportunity wherever it leads.
Status: Our research process is in place. The next step is governance—the framework that allows decisions to be made quickly while ensuring that they are properly challenged, reviewed and checked.
Infrastructure
Infrastructure is where our research goes deepest. Power networks, ports, data centres and utilities pay out slowly but steadily, if the assumptions behind them hold. Most of our work is about constantly testing those assumptions.
Europe and the faster-growing economies ask the same basic questions: where power comes from, how it reaches people, and how goods and data move. The answers look very different. In much of Europe the systems exist but were built for another era. Grids are ageing, new connections wait years in a queue, and permits can take longer than construction. In emerging markets, demand is already there and capacity is not, so the question becomes what can be financed, built and kept running under harder conditions. Most investors study one world or the other. We have studied both, and comparing them shows things neither view reveals alone.
We are also willing to go where others hesitate. Many investors keep away from certain emerging markets because they doubt they can take profits out: currency controls, convertibility, tax treatment,
We have looked at how inflation, regulation and interest rates move the returns on these assets, and why some projects that look obvious on paper are never built, or are built and never perform. We give the engineering the same attention as the finance: whether the technology works, what it really costs, how long it takes to build, and where it tends to fail. In this field, those details usually decide the outcome before the financial model does.
We are also willing to go where others hesitate. Many investors keep away from certain emerging markets because they doubt they can take profits out: currency controls, convertibility, tax treatment, and the question of whether a contract will be honoured. Often that doubt comes from an unfamiliar landscape rather than from a close look at the facts. We intend to do that close look. That means understanding how capital actually moves in and out of a market, and building the route home into a project from the start, not treating it as an afterthought. None of this makes the risk disappear. Currency, politics and enforcement are real, and an opportunity that ignores them is not one.
Some of what we found surprised us. We would rather discuss it with the right people at the right time than publish it on a web page.
Status: research done for European and international markets. Engineering know-how in place. Preparing to launch once authorised.
Life Sciences
This is the area where we are most careful about what we claim. Scientific discoveries can open entirely new markets, but turning one into a business takes a lot of capital, a lot of expertise and a lot of time, and plenty of good science never makes it that far.
Our research covers selected parts of life sciences, biotechnology and healthcare technology. We are drawn to the places where scientific progress, commercial potential and lasting demand meet, such as an ageing population, rising healthcare needs and technologies that change how care is delivered.
Judging these opportunities takes more than reading financial statements. Drug development is binary, slow and expensive. A trial succeeds or it doesn’t, and the outcome can change a company’s value overnight. Regulatory approval, patents, whether doctors and health systems adopt a product, and whether the team can execute all affect the result too. We have studied how that risk is priced: what a trial result is worth, how long capital has to wait, and where the odds look better or worse than the market assumes.
This is the area where we are most careful about what we claim. Scientific discoveries can open entirely new markets, but turning one into a business takes a lot of capital, a lot of expertise and a lot of time, and plenty of good science never makes it that far.
We also know where our limits are. Science at this level needs people who have spent careers in it, and we would rather say so than pretend we can judge all of it ourselves. We expect to bring in specialist advisers, and we would ask them to challenge our thinking, not just agree with it. What we hope to find is the point where an innovation becomes lasting economic value.
Status: research finished. Advisers to be brought in as we build.
Growth
A company that has proven its model but needs money to scale is a different problem from an early-stage or a mature business. It has shown that customers want what it sells, and now the question is whether it can keep growing without breaking.
Growth comes in two kinds. Some businesses grow because they are riding a trend that will fade. Others grow because something underneath them has changed, in technology, in how people consume, in how industry works or in the wider economy. Our research is aimed at the second kind.
The question we keep coming back to is whether the growth is creating value or only making the business bigger. The two can look identical for a long time, and telling them apart early is most of the work.
Even then, growth on its own tells you little. A company can double its revenue and be worth less at the end of it. So we look at the quality of the growth: how revenue has developed, what the margins are, how much capital it takes to keep expanding, what protects the business from competitors, how big the market really is, and whether the economics still work as the company gets larger. We have built a framework for judging this, and for deciding what is reasonable to pay for it.
The question we keep coming back to is whether the growth is creating value or only making the business bigger. The two can look identical for a long time, and telling them apart early is most of the work.
Status: framework finished. Preparing to launch.
Energy Transition Partners
Changing how the world makes and uses energy will take decades and a very large amount of capital. Renewable generation, storage, grid upgrades, electrification, efficiency and digital tools all need money at the same time, and industrial demand is shifting underneath them. Much of that capital has not yet been placed, and where it goes will decide how well the transition works.
We approach the sector as investors and economists first.
Our research covers the whole chain, from the technologies and equipment that make the transition possible to the infrastructure and businesses that keep energy systems running. We look at how policy, commodity prices and falling technology costs act on each other, because the economics of a project can change when any one of them moves. A subsidy ends, a metal gets expensive, a panel or battery gets cheaper, and a deal that worked last year no longer does.
We approach the sector as investors and economists first. The questions we ask are about capital: how much is needed, where demand is coming from, how fast the technology is really improving, and what the commercial case looks like once the headlines are set aside. The transition is often told as an environmental story. It is also a story about where capital goes, and that is the part we study.
Engineering matters more here than almost anywhere else. Samuel’s training means we ask whether a technology performs as promised, what it costs to build and run, and where it tends to fail, since a project’s economics usually depend on those answers.
Status: macro, commodity and technical research finished. Engineering know-how in place. Preparing to launch.
Technology & Innovation
Technology is already part of how investment decisions get made, and we are building ours into the firm from the beginning. We are developing our own research platform: data pipelines, backtesting tools and risk systems, along with the analytical capability to support research, market analysis and portfolio construction.
We would rather rely on tools we have built, tested and documented than on whatever happens to be off the shelf. When a model gives an answer, we want to know exactly how it got there and what it was fed with. That matters more than speed, and it is the only way to find out when a model is wrong.
When a model gives an answer, we want to know exactly how it got there and what it was fed with. That matters more than speed, and it is the only way to find out when a model is wrong.
Our interests run across financial data infrastructure, computational research, automation and artificial intelligence, and in particular tools that turn large amounts of information into something an investor can act on. Data alone does not do that. Better data should lead to better questions, and better tools to better decisions, and each of those still depends on a person deciding what is worth asking. Technology serves the research. It does not replace the judgement behind it.
Status: in build.
