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Investment
Philosophy

Our foundation for alpha generation rests on five key tenets:

1

Alpha is scarce.

Manager selection is critical because the majority of portfolio managers will not add value net of fees over the long term.

2

Newer and more specialized managers often sustain superior alpha generation.

Experience has led us to focus on a subset of managers with better incentive alignment, deeper knowledge, greater focus, and disciplined capacity management.

3

Hands-on execution by an experienced and diverse team is critical.

High complexity requires the application of deep knowledge and diverse perspective by seasoned investment professionals. Experienced senior leaders play a highly active role in investment underwriting and portfolio construction.

4

Concentration in best ideas creates value over time.

We seek to build high-conviction portfolios and do not sacrifice manager quality purely for the sake of diversification. We pursue a diverse set of alpha sources, but believe over-diversification can be one of the greatest impediments to long term outperformance.

5

Effective risk management must be forward-thinking.

Backward-looking measures of risk (e.g., standard deviation and VaR) have limits – especially for forecasting risk in stressed market environments. These traditional measures should be married with a forward-looking risk assessment process.

We believe that our pragmatic skepticism, focus on new/specialized managers, experienced team, best-ideas portfolio approach, and forward-looking risk perspective are the most important characteristics of our investment foundation and success. Moreover, our investment philosophy is guided by transparency, alignment of interests, and sound business practices. 

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