Investment Philosophy
Risk = Price
Investing risk is usually characterized as the potential of loss. It is also oftentimes considered synonymous with volatility. To borrow from Howard Marks, we believe risk can be fully measured and quantified as the price that is paid for an asset. Through this lens, a distressed asset at a discounted price can have less risk than what is considered a quality asset for a premium price.
As value investors we live by the popular adage, "you make money when you buy." Entry price is everything in our business. This is certainly the case in our real estate strategies that include the acquisition of existing, cash flowing, hard assets. Our Acquisitions and Investment teams spend a tremendous amount of time running due diligence, financial modeling, research and other functions so we can most accurately model the present value of any asset we purchase.
Our venture strategies don't include the same type of quantified analysis but the principle of risk = price remains important and informs our investment selection process so we only invest in companies at reasonable valuations.
Diversify & Concentrate
Modern Portfolio Theorists have deemed diversification the only "free lunch." But in addition to the risk-reducing benefits that diversification offers, concentration in investment strategy can similarly play an impactful role that maximizes risk-adjusted returns.
Diversify - Where we invest
There are many attractive markets in the United States. Through our investment funds we provide a diversified asset mix with investments across the country for the purpose of mitigating region-specific risk.
Concentrate - How we invest
Our investment strategy is tried and true and we have the track record to prove it. We have doubled down on our active investment strategies due to its proven viability in all market cycles.
Diversify - When we invest
Time in the market > timing the market. We don't hoard cash while waiting on the side lines, nor do we put ourselves in positions that force us to sell during unfavorable market conditions. We operate in inefficient markets that provide good investment opportunities in any kind of market.
Concentrate - What we invest in
We stick to our core competencies and only invest in assets that can produce meaningful alpha for our investor partners. These asset types, which include value-add multifamily for real estate and early-stage technology companies for venture, each include a specific edge that allows us to outperform the market.
Long-Term Orientation
By simply adopting a long-term orientation in investing, much of the common pitfalls can be mitigated. How can this be achieved with investment strategies that feature only a multi-year hold duration? Answer - by leveraging available tax incentives. By combining high-growth alternative investment strategies with tax shelter strategies, we help grow our investor partner's wealth uninterrupted by taxable events so wealth can compound indefinitely.
We focus on potential returns after taxes. With a 37% top marginal tax rate it would be disingenuous to claim the use of a holistic approach without considering how much our investment strategies can produce in growth and tax savings. We know a dollar today is worth more than a dollar tomorrow which is why we optimize our investment strategies so our investor partners can defer as much taxes as possible, as long as possible.
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