Investment Strategy

We employ a fundamental value investment process to identify securities that we know well and that represent a significant discount to intrinsic value, providing investors with a margin of safety. We assess this by analyzing companies from the “bottom-up” — scouring regulatory filings, financial statements, and industry journals, and interviewing management and industry sources. Our diligence process focuses on the issuer’s free cash flow generation, business quality, industry position, financial condition, prospects for future profitability, and the quality of its management.

We do not invest in securities under this fundamental value strategy merely for the sake of investing. If we feel that the market does not offer significant attractive opportunities, then a large portion of the Partnership’s funds may be invested in low-risk assets until we identify opportunities to invest in securities with higher potential returns.

Portfolio Construction

Because opportunities matching the above criteria are rare, the Partnership is likely to be concentrated in a limited number of securities (between 5 to 15 positions). In pursuing this strategy, we have no particular market capitalization requirements. Moreover, we purchase securities with a long-term investment horizon (typically 1 to 5 years), seeking to achieve long-term capital appreciation.