- “Investment is most prudent when it is most businesslike.”
- Ben Graham
Enhanced Risk-Adjusted Returns
We invest in the traditional manner of high net worth investors, which centers on a “protect your downside first” and risk-adjusted returns approach. We then overlay this with a focus on generating enhanced results through effective and strategically advantaged investing in a fundamental and concentrated manner as well as focused resourcing of a select group of companies. It is through this combination of elements that we work to drive enhanced business value and ultimately enhanced risk-adjusted returns.
We do not earn our returns from the “deal”, but rather from the investment itself. This approach is in stark contrast to the common method of creating returns as a result of the greater risk associated with aggressive leverage, and in absolute opposition to the general practice of diversifying away enhanced return opportunities by following a broad portfolio theory approach.
Our investment approach also extends to the equity structure associated with our investments. As a general rule, we use simple, single-class equity structures where all investors hold the same security and have the same economic rights and protections. In our experience, this approach tremendously impacts value-creation through aligning all stakeholders toward a common goal and creating a true partnership orientation by eliminating any suspicion of “the investor” having an alternative agenda.
Overall, our risk-centric, high net worth investment approach is supported by our disciplined fundamental investment orientation, simple and prudent capital structures, concentrated investments, and aligned long-term focused high net worth investor base that provides significantly more flexibility to enter and exit investments. And it is a combination of these elements that support driving truly enhanced risk-adjusted returns.