Generating idiosyncratic alpha from behavioral drift

Olive Asset Management pursues a market-neutral strategy focused on systematically extracting idiosyncratic alpha from global micro- and small-cap equities. The goal is to neutralize market beta while amplifying stock-specific insights sourced through intensive primary research. Olive operates with two core engines: a fully hedged long/short book driven by a behavioral-scoring system, and a dedicated carve-out for special situations and forensic opportunities across the capital stack. The investment process emphasizes repeatable information advantages, disciplined risk management, and behavioral-bias exploitation. The result is a differentiated strategy that compounds capital through the consistent monetization of mispricing at the micro level.

The core portfolio maintains balanced long and short exposure, isolating alpha from market direction. Long positions target durable micro-cap service companies with visible reinvestment runways, validated through bottom-up stakeholder interviews and proprietary scoring frameworks such as the Sophon Score. Shorts, conversely, focus on structurally declining or competitively disadvantaged businesses where behavioral drift - overconfidence, neglect, or misperceived stability - creates asymmetric downside. This approach produces high-signal positioning that benefits equally from fundamental improvement or deterioration. the emphasis is always on understanding who is winning or losing share before it appears in reported numbers.

At the heart of Olive’s edge is a unified behavioral-scoring system that quantifies sentiment, comeptitive dynamics, and operational momentum across hundreds of small-cap equities. Contractors conduct 5-10 stakeholder interviews per day, producing real-world intelligence from customers, partners, and former employees. These insights are structured, scored, and compared longitudinally to identify behavioral inflections - when confidence, satisfaction, or execution materially shift. The scoring system reduces qualitative noise into decision-ready signals, allowing the team to rank companies by behavioral divergence rather than narrative. Over time, this data compounds into a predictive behavioral database that strengthens with every cycle of research.

Roughly 30% of Olive’s capital is allocated to a carve-out portfolio targeting special situations and forensic opportunities - across the capital stack. These include deep healthcare net-nets, liquidation-style cigar-butt longs, and forensic or generalist shorts grounded in accounting or governance decay. The objective is to capture idiosyncratic payoff uncorrelated with the core market-neutral engine. Each position is underwritten through proprietary forensic screens, channel checks, and balance-sheet validation to isolate where reported numbers diverge from economic reality. This portion of the strategy provides a contrarian ballast - turning behavioral failure into alpha through disciplined skepticism and hard-data validation.

Olive’s philosophy is rooted in the belief that inefficiency persists in the smallest corners of public markets because few investors are willing to do the unglamorous work of direct intelligence gathering. Information asymmetry and behavioral drift - rather than macro views - are the raw material for alpha. By systematically quantifying qualitative data, Olive bridges the gap between investigative research and portfolio construction.