Investment approach
Unashamedly
fundamental.
Our approach rests on fundamental research. We aim to purchase assets that are cheap relative to their intrinsic value, and we accept that the cheapest assets are rarely the most comfortable ones to own.
Price, value, and the gap between
Every investment we make begins with the same question: what is this asset worth, and what is being asked for it? Answering the first part properly takes work, reading, visiting, arguing, and a long memory for how businesses actually behave over a cycle.
The gap between price and value is not evenly distributed. It tends to open widest where attention is thinnest: in small companies, complicated structures, unfashionable industries and forgotten geographies. We therefore sometimes invest in areas that are profoundly unpopular.
Unpopularity is not a strategy on its own. Cheapness must be paired with durability, a business, an asset or a structure that can survive long enough for the market to change its mind, and management who will not squander the interval.
Where those conditions hold, we are willing to be early, concentrated and patient. Where they do not, we are willing to own nothing at all.
Across the capital structure
We are not constrained to one instrument, one market or one domicile. The mandate is the opportunity set.
Anything, anywhere, anytime: provided the price is right and the mandate allows it.
The four principles, at length
01Generalists, with freedom and flexibility
Specialisation forces a manager to keep buying within a narrow field whether or not that field is attractive. We would rather compare a listed holding company against a private lender against a piece of property debt, and buy whichever offers the most value. Freedom to go anywhere is also freedom to stay out.
02Focus
We do not try to be everything to everybody. There are a small number of pools of capital, each with a specific and non-overlapping mandate, so that every idea has one natural home and no platform competes with another for it.
03Partnership
Where we hold more than a small passive stake, we partner with management teams who are aligned and capable. We do not run their businesses. We provide oversight, capital allocation discipline and a shareholder who does not panic.
04Business mentality
Proximity to running real businesses changes how you read a set of accounts. Our ability to compare opportunities across a wide spectrum, together with that experience, produces insights and opportunities that a purely financial lens does not.
Good ideas are scarce. When we find one we want it to matter to the outcome.
We are long-term shareholders who will support a good plan and question a bad one.
A wonderful business bought too dearly is still a poor investment. Price is the only variable we control.
See where the approach is actually applied.