Core long positions will be businesses with characteristics including market leadership and sustainable competitive advantages, proven management with a track record of capital discipline and value creation, strong free cash flow, and those that are trading at a demonstrable discount to our estimate of intrinsic value.
Core short positions will be businesses with the opposite characteristics which include weak fundamentals, dispassionate management teams with minimal alignment with shareholders, a history of poor capital allocation decisions, unsustainable balance sheets and/or dividends and accounting irregularities, and trading at a premium to our estimate of their intrinsic value.
Short selling is viewed as a core competency of our investment team and is used to both drive returns and mitigate risk in the portfolio.
The event driven allocation will aim to take advantage of shorter term strategies in an attempt to augment our goal of generating attractive risk-adjusted returns throughout all market environments.
Event driven investments will focus on situations where we believe there is a high likelihood of a catalytic event in the near term (less than 12 months). This includes all forms of corporate activity, such as mergers & acquisitions, corporate re-organizations & spin-offs or bankruptcies and index deletion/additions. This allocation will also seek to exploit relative value pair trades across industries and corporate capital structures.