We are long-term, fundamental investors steeped in the value tradition of Ben Graham, David Dodd, and Warren Buffett. As contrarians, we seek opportunity in overlooked, underappreciated, and misunderstood businesses, eschewing the market’s myopic obsession with quarterly earnings, volatility, and momentum. We believe a dedication to owning such out-of-favor businesses – rather than the market’s darlings – increases our chances of buying them at deep discounts to their intrinsic values. Doing so can provide a margin of safety – a cushion warding against the risk of capital loss resulting from over-estimating such factors as a business’ growth prospects or the acumen of its management team – which bolsters downside protection while maintaining significant upside potential. To capitalize on such opportunities, we partner with highly-skilled, disciplined managers employing a wide array of value-oriented strategies around the world.
We invest with small, value-oriented managers employing a diverse set of investment approaches around the world. We believe these contrarian, capacity-constrained managers are optimally positioned to tap a vast universe of opportunities unavailable to larger, consensus-driven investors. Exercising remarkable patience and discipline, and local expertise, they identify attractive, but often overlooked and misunderstood, businesses selling at significant discounts.
We believe a detailed and thorough vetting process is warranted prior to establishing long-term partnerships with managers. Through our investment process we aim to understand a manager’s investment strategy, skillset, and discipline, as well as his or her passion, motivation, and integrity. We spend the bulk of this time diving into a manager’s individual investment ideas to examine his or her thought process, analytic skills, and valuation methods, the depth of his or her research, and the discipline he or she exhibits in buying and selling positions. We insist on a high level of transparency and value self-reflection and humility, a trait often reflected in a manager’s attention to downside protection, reliance on conservative assumptions to estimate a business’s intrinsic value, and capacity to admit and learn from mistakes. Our operational due diligence process consists of a comprehensive review of the manager’s business and infrastructure with an eye to ensuring the manager has put key safeguards in place and adopted best practices, and, critically, that he or she has a clean record of governance.