INVESTMENT PHILOSOPHY (Page 2 of 6)

Activities

The investment mandate for the capital entrusted to our care contains few restrictions.  This flexibility enables us to allocate capital to any viable opportunity that presents itself unconstrained by considerations such as geography, market capitalization, industry sector or capital structure position.  Our sole objective in all of our investment activity is to maximize the long term return on capital for our investors while always ensuring that we minimize the risk of permanent capital loss.

Our primary emphasis is making commitments to a limited number of long term investment holdings. These are businesses with outstanding business economics, that are run by capable and honest managers, and which are available at attractive prices. We describe this concept simply as “Great Business, Great People, Great Price”.  While not our primary emphasis, we also participate in arbitrage and workout situations as well as high yield and distressed positions as circumstances warrant and opportunities present themselves.  Because we are disciplined and risk averse, we are willing to hold cash and other net assets, usually short term treasury bills, when we are unable to find enough attractive investment opportunities.  Finally we are always attentive to ways that will mitigate risks for our investors including the purchase and sale of various derivative instruments from time to time.