Our objective is long-term growth of principal by targeting companies that can appreciate 50% over a 3-year time horizon. We do this with an emphasis on downside protection by selecting high-quality companies while avoiding those that are more speculative.
The Concentrated Strategy invests in 20-30 companies that, in our opinion, exhibit a set of high quality characteristics. These characteristics include differentiated and sustainable products or services, above average free cash flow, below average financial leverage, and a management team with a strong track record of both operational execution and capital allocation. We look to buy these businesses when they are trading at a discount to our estimate of their intrinsic value. This is achieved through a bottom-up portfolio construction process based on intensive, fundamental research and valuation analysis while incorporating a view of the macro factors. This process is implemented using a proven team-based approach.