Themes

Value

All assets - debt, equity, physical assets, and operating companies - derive their intrinsic value from projected cash flows. The essence of value investing is buying an asset below its intrinsic value. We do not make investments that are predicated on optimistic assumptions regarding future cash flow.

Asset / Downside Protection

We are willing to sacrifice upside potential for downside certainty and spend considerable effort analyzing and establishing worst-case outcomes.

Avoid Leverage

Compounding the severity of negative outcomes, leverage has been the single-most dominant theme in investment disasters - over and over again. If an investment needs leverage to produce an attractive return, it is probably not a fundamentally sound investment.

Fundamental Research and Analysis

We conduct exhaustive in-house business, legal, and technical research and analysis. We augment our internal resources by regularly using world-class consultants and attorneys. All potential investments are subjected to thorough internal scrutiny.

Distressed Situations

We are most comfortable letting other investors "go first" - we prefer to be the second or third buyer of an asset and seek to take advantage of circumstances where either the seller is distressed and in need of liquidity or where the issuer is in some form of distress as a credit.

Diversification

Non-correlation to broad market indices is enhanced and the impact of errors is decreased.