What We Look For in a Company

Proven Management

• Great businesses are built by first-class management teams.
• Often these are individuals who think like owner-operators, who consider the strategic and operational implications of their decisions, who allocate capital on a day-to-day basis in a financially productive fashion, and who manage risk in a manner that maximizes shareholder value over full market cycles.
• We view management as partners and place great value on those individuals who by their actions exhibit an exceptional degree of intelligence, energy and integrity.

Durable, Financially Strong Business Models

• The best long-term investments are typically durable, well-managed businesses that thrive in good times and have the financial strength to weather more challenging environments.
• We seek to invest in businesses that generate ample free cash flow from products and services that are not prone to obsolescence risk, earn high and/or improving returns on capital and ideally are well positioned to benefit from long-term secular tailwinds.

Sustainable Competitive Advantages

• Capital tends to flow to businesses offering the highest returns. Therefore, even the strongest, most well-managed businesses must constantly build and maintain formidable competitive advantages over competitors in order to preserve their superior economics.
• To maximize our chances of compounding our clients’ capital effectively over full market cycles, we have a strong preference for businesses with wide (and growing) competitive moats. The moats may include globally recognized brands, a dominant or growing share in a growing market, a superior profit model, a lean cost structure, unique distribution advantages, unique intellectual property, and so forth.