Core Principles

Fundamentals

Our portfolios reflect the strongest

convictions of the portfolio

managers in terms of asset

allocation, thematic, sector and

securities selection.

Our investment philosophy is

based on comprehensive

quantitative and qualitative

analysis.

Conviction

Convexity

We seek asymmetrical

investments, where there is

high upside potential and limited

downside risk.

Our core investment approach has changed very little over the past 25 years. It is an enduring and repeatable approach that has been tested by

numerous market and business cycles. While it is intuitive and easy to understand, in practice, in our opinion, it requires a high degree of

discrimination and patience.

It is common knowledge that the average return in the U.S. equity asset category over the last century has been in the neighborhood of 9% or

10%. It just so happens that this figure correlates with the rate of return on the owner’s capital and frequently with the growth in the book value

per share of the typical U.S. company. We posited from this observation that our return on an asset would therefore approximate the return on

the owner’s capital, absent any distributions, and assuming a constant valuation. And since our stated goal is to compound our clients’ capital at

an above average rate while incurring a below average level of risk, we needed to identify this group of superior businesses which earn above

average rates of return on their owner’s capital.