The Foundation of Our Philosophy Is: Innovation + Evolution = Opportunity
Our firm believes that an evolutionary approach to research and building portfolios is the best organizing principle for understanding changes in technologies and industries, their trajectories and trends, and their potential future path of growth and profit. We believe this approach addresses some of the increasing limitations of traditional approaches.
Fundamentally We Believe That…
- Wealth creation is driven by important innovations that power the evolution of technology, products, services, business models, industries, the economy, and society as a whole. Our firm was founded to focus on these dynamics and identify the leading innovators developing and driving these important changes across the economy. This is our firm’s singular focus for adding value for our clients.
- Everything evolves, and in this evolutionary process lies investment opportunity. This progressive and sometimes disruptive evolution creates long-term investment opportunities under select conditions. We believe we have identified these conditions and built them into our investment strategy, criteria, and process.
- While innovation and industry trends are the drivers of evolution, and, ultimately, economic growth, not all innovations or trends are investable. In fact, most are incremental and copied by competitors or never get off the ground, having been hyped before they were ready for the mainstream. As a result, we search for what we believe are investable innovations and durable secular growth trends, looking for innovative companies that meet our stringent set of investment criteria.
- As industries grow and evolve over time, they develop along different structural paths, most ending up highly competitive, with fewer evolving along a less competitive path. We focus on the latter. Most industries develop into highly competitive ones where profits are competed to low levels, industries we strive to avoid. However, some industries with certain unique characteristics can evolve along a more attractive path, where the ultimate industry structure leads to one or a few companies capturing a significant portion of the value they create for consumers. We focus our research efforts on industries experiencing high levels of innovation and developing along an attractive evolutionary path. Given the rarity of these types of businesses, we prefer to be selective, owning a concentrated portfolio of our best ideas.