Principles

Investment Principles

Our investment activity is guided by the following core principles, formed over the course of decades of private equity investing

Single greatest determinant of investment performance is entry price

  • Maintain rigorous price discipline on entry, as there is no solution to overpaying
  • Market dislocations create excellent entry opportunities

Industry leaders are generally in that position for good reasons, and broken companies are often broken for good reasons

  • Buy good businesses and invest behind strong managers
  • Do not presume you can fix what others have tried and failed to solve

Stable businesses with strong cash flow profiles make for great investments

  • Avoid fashionable sectors
  • Prize cash flow generation and sustainability

Assume nothing and maintain a meticulous attention to detail

  • Perform due diligence without preconceptions
  • Listen closely to those who disagree

Strong management team is critical to investment success

  • Diligence management extensively
  • Align incentives and create true wealth-creation opportunities deep into the organization

No one ever regrets a conservative capital structure

  • Take less leverage than offered
  • Choose flexibility over pricing

Be aware of the chess pieces on the board

  • Note the various stakeholders surrounding an opportunity and consider how their interests align with yours
  • Look for the exceptional opportunities created when macro forces align

Sell when the sun is shining

  • Waiting for a slightly higher price is a bad risk / reward tradeoff on successful investments

Smart capital around the table leads to better outcomes

  • Partner with other investors who can add value
  • No monopoly on good ideas, no ego and no pride of authorship

An Old-School approach and personal integrity lead to better investment outcomes and opportunities

  • Behave honorably. Reputation as a good partner and honest broker is critical to current and future success
  • Only work with those you respect and trust

There is always another card to play

  • Remain focused during setbacks to optimize outcome