Our Principles

“Principal-based investment management employs a focus on investment principals that have stood the test of time. We do not base our decisions on short-term market predictions. Instead, our goal is to identify a small number of experienced managers who share our philosophy and who offer the potential to outperform their peers over a long period of time. Our investment team then creates portfolios of those managers using a well-defined quantitative and qualitative process.”

Principle-Based Investment Management

We believe a disciplined commitment to investment principles is the key to long-term investment success:

  • Maintain a long-term perspective instead of jumping in-and-out of the market
  • Diversify by security, asset class and investment manager, instead of concentrating bets
  • Own quality investments that have a demonstrated track record of superior performance instead of chasing the hottest trends
  • Keep costs low
  • Rebalance portfolios to maintain a consistent level of risk as market conditions change
  • Identify quality managers through rigorous due diligence
  • Understand that recent strong investment performance may be due to luck instead of skill
  • Act as a fiduciary and always put the client’s interests first

We believe professional investment management has two separate but equal goals: Earning a competitive return, and managing risk.  If you don’t manage risk, it is unlikely you will earn a competitive return.


Our Process

We believe strong investment portfolios are created by first identifying a small number of investment managers who  offer the potential to outperform their peers and their respective benchmarks over a long period of time.  Our research begins with a proprietary quantitative filter that reduces the entire universe of 16,000 strategies down to a few hundred candidates.  If a manager passes that initial screen and looks promising on a quantitative basis, the next step is to conduct a due diligence audit by interviewing representatives from the company. If we have confidence in the manager’s investment process and discipline in executing that process, we will consider it for one of our portfolios.  If a manager makes it into one of our portfolios, we continue to monitor it closely, and we will continue to do so for as long as the manager remains part of our program.

When conducing our manager due diligence, we are looking for those characteristics that we believe should lead to strong performance over the long term.

Our due diligence audits focus on the key characteristics that, in our view, define an outstanding investment manager:



Examination of a firm’s ability begins with a study of that firm’s culture.  A critical facet of culture is how a firm manages the tension between their fiduciary duty to investors and the internal pull towards asset gathering and increased revenues.  We believe firms who lean too far in the direction of their own commercial interests should be avoided.  Oftentimes, firms with a culture focused on investment results are employee-owned versus being owned by a large bank or insurance company.  Firms with a marketing culture often launch new products to take advantage of hot trends, and rarely close a fund to protect current shareholders from new asset flows when the market is high.  In our view, strong investment firms have a well-defined competitive edge and a history of excellent results.



An investment firm’s most important assets are its people.  The best firms have investment teams that are broad and deep.  Their analysts and portfolio managers are experienced, accomplished and credentialed.  The best teams are collaborative, yet also have clear responsibilities and are accountable for their own decisions.  Quantitative and qualitative performance measures should be in place to incent behavior that is aligned with the goal of achieving strong investor results.



Strong investment teams have a process in place that focuses on a deep understanding of the companies being considered for investment, rather than predicting short-term changes in the markets or the economy.  We favor investment teams that have a long-term perspective, which can be measured by examining the portfolio’s trading history.  Strong teams also employ a disciplined approach to risk management.  Sound risk management places emphasis on a consistent and repeatable process.  Proper risk management is not a compliance procedure or a last step, it is truly embedded in the investment process and provides clear limits on behavior and investment practices that could potentially lead to unrecoverable losses.



The strongest investment teams have a long-term track record of consistent results.  Certain investment managers have strong recent results because their particular style or strategy is temporarily in-favor.  We believe it is important to take steps to avoid managers who simply have a “hot hand”. That’s why results should be considered during a variety of different time periods and market environments.  The goal should never be to achieve the best performance over a short-term time frame.  Managers who show the potential to outperform peers and appropriate benchmarks over the long-term are strongly considered, but prior to purchase, we carefully measure how those managers performed during previous market declines.  Simply stated, we are looking for managers with a perceived identifiable edge that we believe can be maintained over many market cycles.



The investment industry is well-known for its habit of layering-in fees and expenses which, in some cases, are less-than transparent.  We take careful steps to understand all expenses associated with the managers we’ve invested in.  Firms are only considered for investment if we believe the cost is reasonable relative to the value-added to our investor’s portfolio.