Philosophy
The business-owner mindset
We invest as long-term business owners. Every holding is evaluated on its economics, competitive advantages, management, and long-term prospects. Our objective is to compound our partners’ capital over decades while minimizing the risk of permanent loss.
We prefer a handful of outstanding businesses held for long periods of time rather than frequent trading or excessive diversification.
What we look for
Common traits across our investments:
- Durable competitive advantages
- High returns on invested capital
- Reinvestment opportunities at attractive rates
- Aligned, capable, and honest management
- Purchase price below intrinsic value
We favor simplicity, durability, and long-term economic resilience.
How we think about risk
Volatility is not risk. True risk is the permanent impairment of capital. We pay close attention to downside scenarios, balance sheet strength, and the predictability of long-term cash flows.
- We size positions conservatively
- We avoid leverage at the portfolio level
- We stay within our circle of competence
Our quantitative background helps us understand tail outcomes, convexity, and portfolio resilience under uncertainty.
Opportunistic investments and selective use of options
While our core is long-term ownership of high-quality businesses, we remain flexible and opportunistic. We pursue special situations where the risk–reward is unusually asymmetric—such as spinoffs, recapitalizations, dislocations, or forced selling that creates temporary mispricing.
We may also use options selectively and conservatively when they offer a clear structural advantage: either to add right-tail convexity at favorable prices or to mitigate downside risk without introducing leverage. Options are opportunistic tools, not a trading strategy.
These opportunities are pursued only when well-understood and complementary to our long-duration core holdings.
Alignment and incentives
We believe compensation should only be earned when clients prosper. Accordingly, we charge no management fees.
This structure aligns our incentives directly with our clients: we win only when they do.