We are a value investor, focused on underlying business fundamentals and on companies managed in a shareholder friendly manner.
We have have a long-term investment horizon, and we often invest in businesses that are out of favour for reasons we consider temporary.
We endeavor to avoid permanent loss of capital by not paying too much for an asset and by understanding the fundamental risk of each asset. We believe in capitalizing on the cyclicality in valuations, earnings and credit spreads; we relish the opportunities that arise out of market herd behaviour and create cyclicality in financial markets.
We are cautious investors, and we try to only pay for expected outcomes and we try to keep a margin of safety. In other words, we strive to leave room for upside potential.
A portion of our portfolio is managed internally, and a portion is invested through external portfolio managers. We build long-term relationships with our external portfolio managers and are very careful in the selection of the right team. In particular, we look for the following attributes in an external manager:
- an understandable and well-defined strategy, used successfully over several cycles;
- a fundamental and bottom-up investment approach;
- an independent mind;
- a long-term investment horizon;
- a concentrated portfolio;
- limited assets under management; and
- strong alignment of interests due to of a high degree of co-investment by the manager.