Discover How You Can Grow Your Investments With Managed Risk (Watch our video)

Watch our video and ‘Discover How You Can Grow Your Investments With Managed Risk‘

Investment Philosophy

Investment Partners Fund - our investment approach - investment philosophyFundamentally-based value investing combined with opportunistic and dynamic risk management can lead to meaningful long-term capital appreciation. We seek to buy a portfolio of well-run companies with a demonstrated ability to generate free cash flow, allocate capital and deliver returns to investors.The companies in our portfolio will trade at reasonable valuation levels relative to other stocks in the market.  Believing that loss of principal is the primary risk facing our investors, we seek to eliminate some of the drawdowns experienced by equity market investors by using an actively-managed portfolio of risk management tools.

Investment Process

Investment Partners Fund - our investment approach - investment processThe Manager’s equity investment process is founded upon extensive screening followed by deep research and careful analysis.  The process also typically involves seeking a dialogue with management. Ultimately, the Manager builds and maintains financial models to develop forecasts of a security’s value.  The attractiveness of the investment opportunity will be a function of price. The Manager will refrain from investing until the price is low enough to allow for a satisfactory return over a defined time horizon. The Manager expects that a typical portfolio will be comprised of 20 to 30 securities.

Overlaying the equity portfolio, the Manager will selectively deploy limited risk derivatives strategies in an attempt to mitigate the portfolio’s vulnerability to overall declines in equity prices. By using options on equity indices and, occasionally, on individual securities and ETFs, the Manager will seek to implement these strategies if and when market conditions allow for their cost-efficient application. In the event of market declines, the Manager will need to actively re-balance the portfolio of hedges so as to extract value from the portfolio.  The Manager will seek to dynamically manage the hedge portfolio in an attempt to minimize costs and optimize protection.

Risk Management

Investment Partners Fund - our investment approach - Risk ManagementThe Manager’s approach to risk management includes a passive and an active component.  The passive component of the Fund’s risk management stems from the manner in which investments are selected and the portfolio is constructed. By seeking investments in securities where a combination of compelling valuation, strong balance sheets and robust business models prevails, the Manager’s security selection creates a margin of safety. Moreover, judicious portfolio construction, which implies both meaningful diversification and the avoidance of over-concentration, further contributes to the passive component of the risk management strategy.

To complement and re-inforce this approach, the Manager will deploy an active risk management strategy predicated upon two tactics, namely the application of stop-losses on individual securities and the opportunistic use of risk management tools to manage market risk (explained in the Investment Process section above). The use of stop-losses will, on a security-by-security basis, seek to limit the degree to which the Fund will decline in value should market value of a security decline. Stop-loss levels will be predetermined in accordance with an individual security’s historical price patterns and volatility. While stop-losses do not by any means eliminate risk, they can reduce the extent to which an orderly decline in prices will impair the portfolio’s result.

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