Investment Process

Overview

Defining a High Quality Universe

  • Proprietary quantitative screens used to identify an investable universe
    • History of strong and stable profitability
    • Durable free cash flow
    • High returns on capital
    • Low financial leverage
    • Solid shareholder orientation
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Fundamental Research

  • A rigorous, bottom-up approach
  • Seek to identify
    • Attractive business models
    • Durable competitive advantages
    • Profitable growth opportunities
    • Management who effectively allocate capital
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Portfolio Construction

  • Concentrated portfolios of 20 – 30 companies
  • High active share
  • Mid-teens IRR hurdle rate for portfolio inclusion

Portfolio Monitoring and Risk Management

  • Managing business risk through fundamental research efforts is key
  • Regular research team meetings and portfolio review
  • Seek to avoid company specific, competitive, business, financial, and price risk