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Our Investment Philosophy

This is based on four clear and demanding criteria….

  1. We look to own businesses whose intrinsic value is rising all the time. This is achieved by earning returns on invested capital well above their cost of capital on a sustainable basis and where risk of erosion of these returns is regarded as low. 
  2. We want businesses with low levels of financial risk. Typically, this means that net debt to EBITDA of below 2.5x, high interest cover ratios, and moderate levels of pension and other off balance qualities.  
  3. We look for management that allocates capital to the benefit of shareholders. This means an emphasis on small, accretive acquisitions over large deals where value destruction is common. We also favour management that repurchases shares when they are attractively priced and pay consistent dividends. 
  4. We aim to own businesses that satisfy the above criteria only when they trade at a meaningful discount to intrinsic value. This margin of safety is integral to our capital preservation approach and also key to achieving our absolute return objective.