Our process is driven by internally generated and researched ideas. The Firm makes almost no use of Wall Street research for our long process, and we do not actively share our insights with other managers. While all analysts are generalists, they often focus on value chain analysis, studying suppliers, manufacturers, distributors and customers within a specialized area of the economy across market capitalizations.

Our due diligence process often includes extensive fieldwork conducted by research analysts in conjunction with our internal Qualitative Field Research team, including several ex-investigative and business reporters. We utilize field research to obtain proprietary, actionable investment insights through in-depth investigation with rigid compliance guidelines to avoid exposure to material nonpublic information. As part of our detailed analysis, we often speak with a company’s former employees, competitors, suppliers, distributors and customers.

While there is a lead analyst on every company that we follow, generally two to four analysts are involved in due diligence, and one or more of the Portfolio Managers and dedicated Qualitative Field Analysts are involved in the final vetting of potential investments.

There are entire market segments that for a variety of reasons, including short product life cycles, commodity-based pricing, onerous regulatory frameworks or high capital reinvestment requirements, are unappealing to us at any price. Once we find a business that meets our investment criteria, we wait for an opportunity to buy it at a compelling discount to its intrinsic value. Individual position weightings vary based on several factors including quality of business, downside risk and liquidity. We will often establish a new position at a small weighting and build it opportunistically. Portfolio Managers hold discretion over investment decisions.

We are long-term investors, often owning core positions for years while shifting weightings to reflect changes in a holding’s risk/reward profile.