We generate alpha by investing in non-traditional equities and small-cap stocks which offer investors the opportunity to earn above average returns while taking less risk.
Three Pillars of Our Investment Philosophy:
Patience and Discipline
We believe that equity prices over the long-term are supported by sustainable cash flow and earnings growth, coupled with low leverage, giving shareholders the primary claims on the cash generation of the company’s assets. The key here is “long-term”, and many investors do not have the patience to hold these securities without a catalyst on the horizon, we do.
Another key driver of our investment philosophy is “being willing to do the work” on valuations when special situations arise. Many securities, particularly in international markets, require specialized expertise including knowledge of local regulations and business practices, language considerations, and rigorous due diligence to assess relative valuations across companies or within a capital structure. Many larger funds and institutional investors find this work time consuming, and we are able to capture additional alpha simply from these market inefficiencies.
Low Trading Costs
Our patience and discipline drives a two to three year holding period, keeping portfolio turnover low. Our long time horizon keeps costs low for investors, and significantly improves net returns over time via compounding.