Growth Equity Strategies

Our Quality-Growth-Valuation investment process begins with the art of trying to identify high-quality companies—those with unique, difficult-to-replicate business models and sustainable competitive advantages.

Our proprietary seven-step research framework represents our long-standing insights about investing and is structured around three key criteria: Quality, Growth and Valuation.

Because we approach investing as if we are buying into a private business, a long investment horizon is central to our philosophy.

Because we define risk as a permanent loss of capital, we take an absolute-return approach to investing and seek to actively manage our downside risk.

In our view, a long investment horizon affords us the opportunity to capture value from secular growth opportunities as well as capitalize on the stock market’s shortsightedness through a process called time arbitrage.

We are looking not only for above-average growth, but secular and profitable growth. Easier said than done, as empirical evidence shows only 10% of companies can sustain above-average growth rate over a four-year period.<sup>i

_{i</sup>Chan, Karceski & Lakonishok, “The Level and Persistence of Growth Rates,” The Journal of Finance, Volume LVIII, No. 2, April 2003.}

We are seeking companies that can generate sustainable and profitable growth and invest only when they are selling at a significant discount to our estimate of intrinsic value.

_{*Holding all else equal, the larger the discount between market price of a particular security and our estimate of its intrinsic value, the greater we view our margin of safety. Margin of safety is not an indication of the strategy’s safety as all investments carry risk, including risk of loss.}