Key Pillars

Competitive Advantages

A competitive advantage is a specific characteristic which helps protect a company from competition.
If a company has a competitive advantage, it is a sign that it has a better business model than its competitors. This should help it earn high returns on invested capital for many years.
“In business, I look for economic castles protected by unbreachable moats”

Warren Buffett

Proven management team

A high-quality management team is often the ingredient which differentiates a great business from a mediocre one.
Management plays a critical role in capital allocation and shapes a company’s culture. We like management team’s whose interests are aligned with those of shareholders. We look for honest and capable managers who implement a culture of continuous improvement.
“Over time, the skill with which a company’s managers allocate capital has an enormous impact on the enterprise’s value”

Berkshire Hathaway Shareholders Letter, 1994

Favourable growth tailwinds

We seek to own businesses that benefit from favourable growth tailwinds.
Shareholder value creation is intrinsically linked to a company’s ability to reinvest in attractive growth opportunities. These companies are true compounders of shareholder value.
“Growth is always a component in the calculation of value”

Warren Buffett

Investment Process

Idea generation

We focus our research efforts on companies listed in North America and Western Europe, with strong balance sheets, high returns on invested capital and a solid track record of organic growth and cash generation.

Investment research

Investing in great businesses takes time, diligence, patience, and discipline. We try and learn everything we can about a business before making an investment decision.
We study the company’s history, its business model, competitive advantages, the industry structure, its management team, culture, relevant ESG issues and its growth opportunities.  
Our aim is to identify exceptional businesses which can prosper for many years.

Portfolio construction

We aim to build a concentrated portfolio of 25 to 30 exceptional businesses. When determining our target weights, we evaluate the quality of the business, our margin of safety and what sort of characteristics it introduces to our investment portfolio.

Investment ProcessInvestment Process

In summary

Investors should understand that the price of a stock is not correlated with its past performance. The underlying value of a business, is based on the discounted value of the cash flows it will generate in the future.

Investing in businesses is underpinned by the belief that its share price will be driven by its ability to grow earnings over the long run. Investor returns depend on a company’s capacity to grow revenues, cash flows and the returns it earns over its invested capital.

As value investors, we believe that over time, earnings growth drives share price performance.

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