Strategy Highlights

• Active management with a long-term, private equity approach to investing
• Seek to capture long and short alpha insights in a hedged vehicle to deliver equity-like returns with below-market beta and volatility
• Same alpha engine drives both long and short idea generation. Bottom-up stock selection drives both long and short alpha
• Seven-step research framework focusing on the intersection of quality, growth, and valuation
• Quality-growth-valuation process seeks to recognize mispricing of structurally attractive, high-quality companies as well as structurally deficient, low-quality business models
• For long positions, team must view cash flow growth as sustainable and profitable. Avoid and may short unprofitable businesses and those we believe will experience long-term structural decline in growth
• Stock values modeled and regularly updated based on our four valuation scenarios: Best, Base, Bear, and Worst
• Seek to create a margin of safety by investing/shorting only when a company’s stock price is at a meaningfully discount/premium to the team’s estimate of intrinsic value
• Active risk management defines risk as a permanent loss of capital, not tracking error or short-term relative underperformance
• High-conviction portfolio of generally up to 25 long positions and 25 short positions
• Top 10 long holdings typically 70%-80%