We manage a concentrated portfolio of long-term investments in public and private companies that we believe have both the potential to grow substantially in value and management teams whose interests are closely aligned with shareholders. We consider investment opportunities in a variety of industries, focusing on companies that have the potential for attractive margins and a high and sustainable return on equity. We perform extensive due diligence on all prospective public and private investments. When investing in public companies we prefer a passive, hands-off approach and generally do not become insiders. Occasionally, we may take a more active role in our investments drawing on our many collective years of experience serving on public and private company boards. We do not invest with a strategy of being activist or adversarial shareholders.
We typically acquire positions by buying stock on the open market, through block transactions, or through direct investments, generally targeting initial investments of $1 to $10 million. When making direct investments in public companies, we typically favor uncomplicated common stock purchases which can be carried out quickly and with minimal transaction costs.
The principals of the fund cumulatively own a substantial portion of the capital in the fund. Coupled with structural safeguards built into the fund’s partnership agreements, this provides a stable capital base which gives us the confidence and flexibility to invest for the long-term based on fundamentals. Thus, our investment horizon is typically three to five years but can be much longer. In addition, the structure of our capital base allows us to be comfortable with investments which are illiquid or (if publicly traded) exhibit substantial price volatility.