1

Idea Generation

– Long-term economic themes
– Quantitative screens
– Network of managers and entrepreneurs
– Sell-side analyst contacts
2

Valuation Analysis

– The company’s paper trail
– Management communications
– Proprietary cash flow modeling
– Analyst models and feedback
– Earnings power and normalised cash flow generation
– Use of cash/returns on cash
– The sum of the parts valuation
– Is the price right at this time? Or do we add the company to our ‘radar’?
3

Investment Case

– Where is the divergence between our analysis and consensus?
– How will the company achieve its intrinsic value?
– How will the fundamentals evolve?
– Among the answers could be company re-ratings, management changes, operational improvements and the realisation of unappreciated assets or divisions?
4

Buying Discipline

– We buy in tranches because we will take advantage of early investment opportunities
5

Portfolio Monitoring

– We dynamically integrate relevant new fundamental information
– We evaluate the correlation of the names in the portfolio
6

Selling Discipline

– The full valuation has been achieved
– There are unfavourable changes in the fundamentals
– We find better risk/reward opportunities elsewhere