Our Philosophy

Our approach to investing starts off with the view that we consider ourselves owners of businesses and not just people trading pieces of paper. We invest in a small number of companies, so we get to know each one well.

We want to own companies that have a unique competitive edge that will allow them to grow organically and at a rate faster than the economy. Gaining an edge and creating new ideas and new products requires intellectual capital, the lifeblood of truly successful companies. Intellectual capital in turn drives revenue growth. It also drives profitability. The businesses we are attracted to tend to have low financial capital requirements, which provides high free cash flow. In other words, they generate a lot more cash than they need to maintain their operations.

We believe that the ability to generate free cash flow is what makes a company valuable. But what fosters the culture and the intellectual capital that creates a valuable stream of free cash flow? Management.

We believe that a great management team is a competitive advantage. We look to invest in management teams that are the best of breed and who are focused on creating value for shareholders over the long term. We will only invest alongside a management team that shares our values about prudent allocation of capital. We expect these management teams to adhere to the highest level of ethical standards. Selecting the right corporate managers makes a big difference in the value that will be created for our clients over the long term.

It is not enough to find high-quality companies. The price paid for an investment is extremely important. We will only buy a business when it is trading at a discount to our assessment of fair value.

We are disciplined buyers and sellers of businesses. Opportunities, or the lack thereof, will dictate our cash levels.