What We Do

Our singular aim is to make our clients partial owners of the world’s highest quality businesses. We manage a single, long-only global equity strategy. We concentrate client capital in 18-20 competitively advantaged businesses with the potential to compound shareholder value at above-average rates. We purchase such businesses when they trade at what we believe to be reasonable discounts to their intrinsic value, and we seek corporate managers who allocate capital in ways that benefit long-term minority shareholders.

We do not manage businesses or trade securities. We are in the business of allocating investors’ capital intelligently. We are geographically agnostic and do not target a pre-defined regional exposure.

Our search process for new investments is largely qualitative, since the structural competitive advantages or economic wide-moats that we prize are often not found via quantitative screens.

We invest in socially-responsible and ethical businesses.

HOW WE SEARCH, VALUE & BUY

We admire three features in our search for potential investments:

First, businesses with structural advantages that deliver high returns on invested capital.
Second, businesses able to reinvest capital at high incremental rates for long periods into the future.
Last, businesses led by an owner-oriented, talented and ethical management.

We focus on industries that are proven wealth-compounders, and away from notorious wealth-destroyers. Moreover, a deep understanding of the business model always precedes the purchase.

This approach narrows many thousands of listed businesses down to a watch list of a few hundred. Truly great companies are scarce.

Selection is followed by valuation. Our tools range from discounted cash flow to multiple-based valuation - yielding a range of fair values. Meanwhile, we remain alert to the dangers of false precision. We prefer to be approximately right than precisely wrong.

Finally, we determine a target price that would warrant a buy. Part of this process is the balancing act between risk and opportunity. On the one hand, a margin of safety protects capital from unforeseen events. Conversely, the value created by remarkable businesses tends to dwarf the entry price over long periods. We are mindful that while price is crucial, there is more to long-term investing in quality businesses.

WHAT WE DO NOT DO

Our approach is to invest, not speculate.
We keep our eye on the business and not on its price. Predicting and guessing future prices is not our game.
We refrain from debt-laden companies. Our investors are discouraged from using debt.
No shorting (buying over-valued assets and profiting from a price collapse).
We like investments where time is a friend. And so we say no to futures, derivatives and other complex financial instruments. Keeping things simple reduces errors.
Owing to our ethical code, we refrain from businesses related to tobacco, alcohol, gambling and adult entertainment.