PROFESSIONAL PORTFOLIO CONSTRUCTION
DISCIPLINE
We believe that only through disciplined investment analysis can a portfolio with characteristics of value and strength be built.
QUALITY
Our investment process accounts for key quantitative and qualitative factors which help us identify companies that exhibit high levels of stability yet maintain a proven ability to grow.
BALANCE
To help achieve this objective we place a high degree of importance on diversification, financial strength, global exposure, and skilled management when building investment portfolios.
INVESTMENT PORTFOLIO QUALITIES
Investment Diversification
Diversification across sectors and asset class
Sector Focus
• Financials • Industrials • Healthcare
• Consumer Products • Enterprise Technology
Targeted Assets
• Stocks • Bonds • Real Estate
• Private Equity
Global Reach and Transparency
Companies that have international scale exhibit certain desirable traits
- Geographic diversification provides protection
- Transparent and strong corporate governance
- Ability to grow into new markets
Stability and Strength
Companies that exhibit financial strength and business stability are paramount
- Strong balance sheet
- Conservative use of debt
- Requires minimal capital to maintain
- Consistent high free cash flows
- Competitive moat and pricing power
Proven Leadership
Management can turn a good investment to extraordinary with skilled capital allocation. We assess management by analyzing the following:
- Mergers & acquisitions success
- Business re-investment results
- Share buyback execution
- Dividend history
THE INSTITUTIONAL APPROACH
In certain cases it is valuable to diversify the Core Portfolio to include private assets such as real-estate and private business investments. This approach to investment management is followed by the majority of sophisticated investment organizations such as pension funds, foundations, and endowment funds. The following are recent comments from some of the world’s most influential financial organizations which echo our sentiments.
BNP Paribas
(global asset manager)
“There can be little doubt that in the future, private equity will continue to constitute an integral part of pension investors’ asset allocation”
Mercer
(global pension consultant)
“The trend away from traditional asset classes observed in recent years continues, driven mainly by investors seeking to diversify their growth portfolios”
CalPERS
(largest US pension fund)
“Private Equity allocations are a means of enhancing equity returns through a value-added approach to investment management of a diverse set of portfolio companies and to capture the illiquidity premium”
OUR PRIVATE ASSET CRITERIA
Non-Cyclical
Steady demand for product or service irrespective of business cycle
Industry Tailwinds
Industries where the total addressable market is growing into the future
Low Capital Expenditure
Minimal capital re-investment requirements to maintain business allows for high cash flow to investors
Fragmented Ownership
Industries with several independent owners helps to maintain reasonable valuation levels. Also known as the illiquidity premium