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Capitalizing on Two Market Inefficiencies

  • TIME—most investors have a very short investment horizon. We apply our process through the lens of long-term business owners, avoiding emotional decisions and allowing our holdings to compound.
  • RISK—we believe markets are less efficient at assessing risk than reward. Throughout our process, we embed downside protection, primarily by focusing on companies exhibiting its two key drivers.

Two Key Drivers of Downside Protection

  • Sustainably high and improving returns on capital
  • Strong balance sheet that affords management financial flexibility

Core Philosophy

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Committed to Downside Protection

The foundation of our approach is to mitigate downside risk with the goal of long-term outperformance and lower volatility.

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Focused on Facts to Reduce Speculation

Rather than trying to predict the future, we form our investment thesis based on what is true today, using our Balance Sheet Optimization approach to valuation.

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Truly Long-Term Oriented Investors

We invest in a select number of high-quality companies through the lens of a business owner, as if we were buying the entire company to hold indefinitely.

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One Team, One Process

Investing across the capitalization spectrum allows us to view companies over an extended life-cycle—from small to mid to large—and reinforces our long-term horizon.

A Long-Term Quality Value Approach

High-Quality Companies

100% Bottom-Up Approach to Find Quality, Sustainable Businesses

  • Durable competitive advantages, consistently high returns on capital & cash flow
  • Effective capital allocation
  • Capable management with incentives aligned with shareholders
  • ESG through the lens of a long-term investor

Balance Sheet Optimization

A novel approach to valuation that assesses the strength & flexibility of the balance sheet to create a more concrete margin of safety

  • Analyzes management’s ability to reduce its cost of capital by optimizing its balance sheet
  • Limits speculation inherent in growth forecasts
  • A private equity approach to public equities

Focused Portfolio Construction

Solving the Problem of Over-Diversification

  • High active share: 25-35 holdings
  • Better performers allowed to appreciate
  • Don’t average down
  • Long-term orientation results in low turnover ~20%

Sell Discipline

Help Avoid Large Losses to Maximize Return

  • Misallocation of capital
  • Fundamental deterioration
  • Significant insider selling
  • Identify more attractive candidates
  • Quantitative soft stop-loss

Consistent Portfolio Composition

Stocks in Concentrated Portfolios
Low Average Annual Turnover
Years for Long-term Holding Period

See Our Strategies

The London Company invests across all market capitalizations, offering U.S equity portfolios through separately managed accounts, mutual funds and select channels


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