By employing a comprehensive risk mitigation framework, we optimize portfolio performance and dampen down-side volatility at the total Fund level. Effective risk management and capital preservation is a key part of our investment strategy. We define risk as the permanent impairment of capital or an inability to effectively achieve the target rate of returns.
High Quality Companies
Comprehensive & Systematic Underwriting Process
By allocating to the highest quality companies, we can address long-term risks stemming from major economic disruptions.
We systematically mitigate risks by:
- Thoroughly analyzing qualitative and quantitative characteristics.
- Stress testing business financials to anticipate worst-case scenarios.
- Calculating intrinsic values with extremely conservative assumptions.
DIVERSIFICATION Achieved Through The Underlying Companies
By selecting companies with exposures across multiple sectors, we address near and long-term systemic and cyclical risks.
Our portfolio is diversified through:
- Investments and exposures across industries, sectors, verticals, lines of business
- A deep understanding of holding correlations.
Active Risk Management
DERIVATIVE OVERLAY PROGRAM For risk management
Through a methodical and flexible derivative strategy, we address shorter-term and idiosyncratic risks.
- Our program compliments long-term perspective of the strategy by preserving capital during market drawdowns.
- We designed it with optionality to capitalize and monetize on significant market dislocations.
Our Investment Edge
We seek to capitalize on market inefficiencies created by behavioral, analytical, and informational flaws embedded in the market.
- Flexible mandate provides maximum optionality.
- Strategy employs a disciplined and systematic approach to investing.
- Longer term holding period with prudent levels of portfolio leverage.
- Willingness to be contrarian when research and fact patterns support the thesis.
- Focus on long-term economic drivers of a business.
- Identify misunderstood and transformational changes within a business.
- Derive intrinsic value from a conservative application of the business economics.
- Ensure reported accounting reflects underlying fundamental economics.
- Disaggregate parts of the business to identify hidden values.
- Stress-test to ensure a margin of safety.
- Proprietary, multi-disciplinary and comprehensive research approach (scuttlebutt method).
- Reliance on data synthesis to analyze industry ecosystem, business model, and execution strategy.
- Intensive, investigative fieldwork to fact-check thesis.