Michael Zapata is the founder and general partner of Sententia Capital. He received his B.S. from Texas A&M University and was commissioned as a Naval Officer in May of 2001. Throughout his time in the Navy, Michael served as a Navy SEAL officer and deployed seven times during the Global War on Terrorism. Following his last command at the Naval Special Warfare Development Group, Michael transitioned out of the military to attend Columbia Business School in 2011. There he was accepted into the The Heilbrunn Center for Graham and Dodd Investing and earned his master’s degree with a focus on investment management. Upon completion of his MBA, Michael formed Sententia Capital Management.
DarcMatter: Please provide a high level overview of your investment process.
Michael: Sententia is focused on the disciplined application of fundamental analysis through value investing principles. We implement a continuous investment process to refine, enhance, and build out the Sententia portfolio, encompassing that in a culture steeped in patience and discipline.
DarcMatter: What is your approach to managing risk?
Michael: We apply a disciplined and persistent approach to investment risk analysis and portfolio management controls. We use no leverage and have sizing and liquidity limits along with steady monitoring of individual security and macro factors. For our specific positions, we feel the greatest risk is the price we pay, so we focus on a minimum 30% discount to estimated intrinsic value.
DarcMatter: What differentiates Sententia Capital from other firms in the sector?
Michael: Passion and Intent. We are passionate about being the best, and this inner desire is what compels us to look for continual improvement in all aspects. Intent is how we are going to get there- we are focused on a disciplined value investing application and a focus of efforts to creating and growing generational wealth for our partners.
DarcMatter: What’s going on in the hedge fund industry today? Is there too much capital out there?
Michael: As the economy builds up momentum, interest rates will rise and it will affect bonds. As long as the inflation rate stays in check and doesn’t get overheated, the market will be the best place to be. Hedge funds need to earn their fees, so capital should flow to those who perform well over time.
DarcMatter: Finishing off on a fun note, tell us a little known fact about yourself.
Michael: Have crash landed in Timbuktu; bought a goat and gave it to villagers as “thanks to God” for surviving.