Strong industry position, enabling companies to earn better financial returns than competitors. Companies able to reinvest cash flows at higher rates of return usually attract competition which can erode margins and returns over time. Therefore, companies we are interesting in possess durable competitive moats enabling them to generate long-term superior returns. We are particularly sensitive to moats like proprietary technology, strong network effects, valuable brands, high switching costs, high barriers to entry, and scale.

Companies operating in an industry enjoying secular growth have the potential to unlock compounding effect advantages. Indeed, we believe that companies able to reinvest their cash flow at higher rates of return in a fast growing and sustainable sector will likely see their valuation increase in the long run.

We are looking for companies with strong free cash flow (FCF) generation and less reliant on debt to fund business growth. It usually results in solid balance sheet with an all-weather financial capacity to operate hence, less likely to experience high volatility and losses during market downturns.

Companies can seize on opportunities for growth when led by the right management teams, who choose to reinvest in the business. We put emphasis on skillful managers with excellent capital allocation track record. We believe a quality management is composed of great leaders, with clear and long-term strategy, established culture, and consistent regard for shareholders.